A friend of mine at Marketwatch.com, owned by CBS, wrote the following short article:
SAN FRANCISCO (MarketWatch) — Moody’s Investors Service said Thursday it may downgrade the ratings of Toll Brothers Inc., Toll Brothers Finance Corp., and Toll Corp. following a review. Moody’s has a Baa3 rating on Toll’s existing senior unsecured note issues and a Ba2 rating on the homebuilder’s subordinated note issues. “In the context of the further deterioration in the already weak outlook for the homebuilding industry due to substantially tighter lending standards, diminished consumer confidence, rising repossessions, and falling home prices, the review was prompted by Toll’s lower than industry average inventory reduction to date and its substantially greater than industry average exposure to the high density mid-rise and high-rise tower business,” Moody’s said in a statement. The rating agency plans to finish the review after Toll reports second-quarter results.
TRANSLATION: Toll Brothers, one of the largest builders of homes in the US, is going to have its credit rating downgraded due to a bad housing market. This news confirms what we investors knew already. The market is starting to bottom out. News reports like these should accelerate the overall housing market decline, which will provide many opportunities for huge profits for investors over the next 12 to 18 months.
