Credit Rating

LOS ANGELES - California officials were meeting through the holiday weekend to try to address the state's $38 billion budget shortfall and an imminent reduction in the state's low credit rating. Gov. Gray Davis vowed to resist a Republican budget plan that he said threatened education and public safety, and said that a recall election to remove him would waste $30 million that would be better spent for pressing state needs. In brief remarks before he met with his budget advisers yesterday afternoon, Davis said the Republican proposal would postpone kindergarten for more than 100,000 5-year-olds and deny college admission to tens of thousands of students.

The players in the subprime mortgage mess keep increasing: an overinflated housing market, zealous mortgage brokers, homebuyers eager to cash in on the craze (and clueless about the fine print) and now the credit-rating agencies that valued bonds backed by subprime mortgages. With foreclosures mounting and the housing market in a downward slide, no one should escape scrutiny. The Securities and Exchange Commission has begun an investigation of credit-rating agencies centered on a potential conflict of interest.

TOKYO -- Japan deserves a triple-A rating, Japan's Finance Minister Hikaru Matsunaga said yesterday, after the nation's debt outlook was changed to "negative" by a U.S. credit rating company.Moody's Investors Service Inc. changed its outlook for both Japan's "Aaa" country ceilings and the domestic currency rating for the government to "negative" from "stable."The news is a reminder of the importance of Japan's efforts to cut its budget deficit, Matsunaga said at a news conference.Moody's said it may cut Japan's credit rating because of the nation's inability to deal with banking problems and a sinking economy.

Confronted with a steady decline in the city's tax base and population of middle-class residents, one of the nation's top municipal bond-rating agencies is casting a "negative outlook" on Baltimore's economic future.While Moody's Investors Service Inc.'s description -- part of an annual review scheduled to be released Friday -- will not affect the city's credit rating, the firm's characterization represents a symbolic blow, as well as concern over Baltimore' fiscal underpinnings.Moody's is so concerned about the city's financial foundation, in fact, that it even considered placing Baltimore under a "credit watch" for the first time in its history.

On the prowl: Many corporate executives are looking for new positions because they're dissatisfied with their jobs, finds a survey by executive recruiter Paul Ray Berndtson and Cornell University. The survey of nearly 1,900 executives found nearly 30 percent plan to leave their jobs as soon as they find something else. Many survey respondents cited job insecurity or heavy workloads.Getting credit: It's hard enough for entrepreneurs and small-business owners to get credit, and really tough if they've got a bad credit rating.

WASHINGTON -- Expressing serious doubt that city leaders can balance the municipal budget in the current fiscal year, Moody's Investors Service, a Wall Street credit rating firm, yesterday lowered Washington's rating to junk bond status.The decision by Moody's to drop the city's rating to below investment-grade levels followed similar action Tuesday by Standard & Poor's Corp., which lowered the district's rating to one level above junk bond status.With the city facing a projected budget deficit of $722 million and Congress poised to wrest more control of the city's finances, the rating changes have a double-barreled impact.

Carroll County government took in nearly $5 million more than it spent during fiscal 1995, according to preliminary figures compiled by the county comptroller's office.But, budget officials say, all but $800,000 of the apparent surplus was expected and already allocated in the 1996 budget.For the budget year completed June 30, Carroll government spent about $142.8 million, about $1.2 million less than called for in the annual budget, while the county collected more than $147.7 million in income and other revenue, a figure about 2 percent higher than was expected.

Carlos was a price that Sudan was willing to pay to get back its credit rating.The National Reconnaissance Office has blown its cover and must be renamed.

Even though a New York agency lowered Anne Arundel County's bond rating because of the property tax cap passed last year, the county sold $56 million worth of bonds yesterday at a lower interest rate than it received the last time it went to the bond market in May 1992.The county sold the bonds to the lowest of three bidders, Shearson Lehman Bros., at an interest rate of 4.98 percent. On May 5, 1992, the county sold $16 million worth of bonds to Alex Brown & Sons at a rate of 5.605 percent.

Some are saying the new California budget is ''an obituary'' for the ''sense of community'' that bound rich and poor Californians in a compact to assure a better future for everyone in America's perpetually growing state.People are talking of the budget -- agreed on by Gov. Pete Wilson and the Legislature after 64 acrimonious days of no budget, $3.4 billion of IOUs and denigration of the state's credit rating -- as curtains for the California dream.Almost wistfully, they ask if California will ever again invest heavily and enthusiastically in highways and great water systems, in schools and universities, the process that made it a world-respected ''nation-state.

The economic turmoil of 2008 has left few bright spots, but here's one: Mortgage rates have plummeted. Rates on 30-year, fixed loans are hovering around 5 percent - the lowest level since Freddie Mac began tracking rates in 1971. Some economists predict a further slide in rates once Barack Obama becomes president and rolls out an economic rescue plan. And that could mean thousands of dollars in savings for Maryland homeowners. "The people who have done everything right are now going to benefit, and will be very well rewarded," said Mari Adam, a financial planner and owner of Adam Financial Associates Inc. in Boca Raton, Fla. "We are saying to our clients, anyone who can refinance should refinance.

Audit questions state spending, marketing The Maryland Department of Business and Economic Development spent $184,000 on poker tournaments, catered cruises, parties and other marketing events between 2004 and 2007 that were not "adequately evaluated and documented," according to a legislative audit released yesterday. The report also said the department paid employees with no job duties, bought airline ticket upgrades without required approval and gave tax breaks to firms without verifying their eligibility.

Every one of Constellation Energy Group's 1.1 million electric utility customers can relate to the crisis that forced the company into a shotgun takeover yesterday. Essentially, Wall Street threatened to shut off the power. More precisely, the national rating agencies threatened to cut off the company's credit. And without credit, Constellation was on the brink of losing what it needs to keep nearly all of its multibillion-dollar operation turned on and energized. It was a dilemma common to Lehman Brothers Holdings Inc., AIG Inc. and other financial implosions of recent days.

Constellation's rating gets cut A major Wall Street firm cut Constellation Energy Group's credit rating after the Baltimore-based company recently revised its estimate of how much collateral it would need to address such a downgrade. Corporate credit rating agency Standard & Poor's cut Constellation's rating from BBB+ to BBB and gave it a "stable" outlook for maintaining the rating. After one analyst highlighted the revisions and another questioned the company's accounting, Constellation's stock sank 16 percent Tuesday, the largest one-day drop since 2001.

A major Wall Street firm cut Constellation Energy Group's credit rating yesterday after the Baltimore-based company recently revised its estimate of how much collateral it would need to address such a downgrade. Corporate credit rating agency Standard & Poor's cut Constellation's rating from BBB+ to BBB and gave it a "stable" outlook for maintaining the rating. It previously had a negative outlook for the higher rating. The rating downgrade triggers about $106 million in collateral requirements from certain company contracts.

If you can improve your credit scores, you will probably spend less money, perhaps hundreds or thousands of dollars less each year. Here is how to raise your scores, so you can receive the best financing rates and deals, better rates on insurance and all the other benefits of having a high credit rating. *What's a good score? You have many credit scores. By far the most important are your FICO scores with each of the three major credit bureaus, Experian, Equifax and TransUnion. A mediocre score is 700, while a score above 750 should get you all the best deals and borrowing rates, said John Ulzheimer, president of consumer education for Credit.

The players in the subprime mortgage mess keep increasing: an overinflated housing market, zealous mortgage brokers, homebuyers eager to cash in on the craze (and clueless about the fine print) and now the credit-rating agencies that valued bonds backed by subprime mortgages. With foreclosures mounting and the housing market in a downward slide, no one should escape scrutiny. The Securities and Exchange Commission has begun an investigation of credit-rating agencies centered on a potential conflict of interest.

The days may be numbered for dozens of Internet-based companies that promise to quickly boost FICO credit scores by 200 to 300 points. Fair Isaac Corp., the developer of the widely used FICO score, plans to introduce key changes designed to derail schemes that transplant high-quality credit-card histories into the files of people with low FICO scores. The credit-boost companies, easily found on the Web by searching for "rent a credit tradeline" or "rent a credit card," claim they violate no federal laws and are not seeking to defraud mortgage lenders.

Elena Patrice, a single parent in Virginia, is eager to get rid of nearly $20,000 in credit card debt that she's rolled up since her divorce four years ago. So last month, the 38-year-old appealed to online strangers to lend her $20,000 at an interest rate that's about half of what she's now paying. "Once my debt has been consolidated, I will be terminating any credit cards and strictly using cash or my debit card," she promised. Patrice made her appeal on Prosper.com, a site that matches people in need with regular folks willing to bid on the opportunity to lend them $50, $100 or so. With people becoming their own publisher by blogging, or creating their own videos and political commercials on YouTube, it was just a matter of time before they became their own banks.

My wife and I co-signed $40,000 in college loans for our son, and unfortunately he defaulted because of financial hardships. He was lazy, ignored calls and letters from the lender, and his negligence resulted in our acquiring a poor credit rating. We have always paid our bills on time and have always had an excellent credit rating. I called the loan officer, who told me that even if we could pay his loan off our credit rating would continue to show up as poor for the next seven years. We would like to know if we can do anything to restore our excellent credit, while leaving our son with the responsibility of paying off the loan.