A.M. MARKET UPDATE 10.19.09: REAL ESTATE CRISIS RETURNS?

REPORT: MOODY'S HID TROUBLES
DURING REAL-ESTATE 'BUBBLE'
McCLATCHY: As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression. . . . Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings . . . . READ MORE

REPORT: FDIC MISSED SIGNS
WARNING OF BANKING WOES
BLOOMBERG: The Federal Deposit Insurance Corp. failed to enforce its own guidelines to rein in excessive commercial real estate lending by at least 20 banks that later collapsed, reports by the agency’s watchdog show. The FDIC’s Office of Inspector General analyzed 23 lenders taken over by regulators from August 2008 to March and found that for 20, the agency’s examiners didn’t identify the issue early enough or should have taken stronger supervisory action after recognizing the banks had dangerously high levels of the loans before they failed . . . READ MORE

REPORT: FORECLOSURES FORCE
FAMILIES INTO HOMELESSNESS
NEW YORK TIMES; Growing numbers of Americans who have lost houses to foreclosure are landing in homeless shelters, according to social service groups and a recent report by a coalition of housing advocates. Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to “Foreclosure to Homelessness 2009,” a survey produced by the National Coalition for the Homeless and six other advocacy groups . . . READ MORE

CAPMARK TO SELL JAPANESE UNIT;
U.S. LENDER READIES BANKRUPTCY
REUTERS: Capmark Financial Group Inc, a U.S. commercial and real estate company preparing for bankruptcy, will sell its Japanese loan servicing business to Sandringham Capital Partners, a UK-based fund management firm, . . . Capmark Financial, which was created through a 2006 leveraged buyout of certain GMAC assets, has been selling businesses as it is preparing to file for bankruptcy . . . READ MORE

INVESTORS AWAIT EARNINGS
REPORTS FROM MAJOR FIRMS
CNN/MONEY: Apple on Monday kicks off a big week for marquee-name corporations to report results, with 135, or 27% of the S&P 500 on the docket. That list includes 13 Dow components. The standouts are: American Express, Microsoft, Merck (MRK, Fortune 500), Pfizer (PFE, Fortune 500), 3M and Coca-Cola. Other big names due to report include: Yahoo, Wells Fargo, Amazon.com and eBay . . . Since bottoming at a 12-year low March 9, the S&P 500 has rallied nearly 61%, while the Dow has rallied nearly 53%, through Friday's close . . . READ MORE

VIVENDI BUYOUT SNAGS G.E.
IN NBC DEAL WITH COMCAST
WALL STREET JOURNA L: General Electric Co. and Vivendi SA are about $500 million apart in talks over what Vivendi should be paid for its minority stake in stake in television and movie company NBC Universal, according to people familiar with the matter. That stake is a key element in a potential deal that could give U.S. cable operator Comcast Corp. control of NBC Universal, and eventually usher GE out of the entertainment business. GE currently owns 80% of NBC Universal and Vivendi has 20% . . . READ MORE

COMMENTARY: INVESTMENT NEWS
IT'S LIKE 1930 AGAIN
JAY R. FEUERSTEIN: The U.S. stock market and economy are in much the same place now as they were in 1930. Seventy-nine years ago, unemployment stood at about 10%, even though the stock market was 40% above its low set in the crash a year earlier. As the calendar moved into 1931, the bottom fell out. Unemployment ultimately hit 25%, while the stock market lost 84% of its value . . . If policymakers continue along their recent paths, investors should beware that history may repeat itself. Stocks may resume the free-fall they started in September 2008 and housing prices may crumble even more as job losses mount and credit markets seize . . . READ MORE