Wednesday, 13 February 2008

MGIC reported huge losses in the fourth quarter 2007

The booster American Credit has attracted the wrath of the market after publishing a deficit of $ 1.47 billion in the fourth quarter. The action picks up by more than 15% across the Atlantic.

There have been numerous victims of the crisis "subprime". Especially on the side of the enhancers credits, these organizations that provide their guarantee to any private or public institution issuing bonds on the financial markets.

This time, it is the booster credit MGIC reflecting an elephantine loss of 1.47 billion dollars for the last quarter of 2007. Either the equivalent of almost four times the amount of its turnover (399 million dollars) over the same period!

The financial institution has been particularly affected by the recognition of $ 1.2 billion of reserves set aside to enable it to cope with repayments ahead. Its CEO Curt S. Culver felt that if we referred "to the estimates of losses of the company, MGIC should not" make a profit in 2008".

The management has also said they have stopped act as guarantor for loans giving rise to products known as derivatives mortgage-backed. The new has been the effect of a bomb on Wall Street, causing a fall of more than 15% of the title.