Moody’s Slashed Credit Ratings of Big Banks

Moody’s Investors Service on Thursday slashed the credit ratings of 15 large financial firms. Citigroup and Bank of America, two United States banks that were hit hard in the financial crisis, are now rated only two notches above junk. While Morgan Stanley avoided a worst-case scenario of a three-notch downgrade, its rating slipped by two levels.

The downgrades are a serious blow for the banking industry, which is already dealing with the European sovereign debt crisis, a weak American economy and new regulations.

Moody’s downgrades are part of a broad effort to make its analysis more rigorous. The financial crisis stained the reputation of credit rating agencies. Both companies attached high ratings to mortgage-backed bonds that later suffered big losses in the housing bust.

Before the announcement on Thursday, bank shares continued to fall. Goldman Sachs, Citigroup, Bank of America and Morgan Stanley were all down for the day.

Linsanity’s Economic Clout

Businesses capitalize New York Knicks point guard Jeremy Lin’s phenomenal success

The Linsanity  started in February 2012 when Jeremy Lin unexpectedly led a winning streak by New York Knicks while being promoted to the starting lineup. The Linsanity influence resonates beyond basketball court. It penetrates stock market, sales, and marketing, according to SmartInMoney.com.

Jeremy Lin is a Harvard-educated, undrafted point guard for the New York Knicks who seemingly emerged from nowhere to become an international phenomenon. He is also the first N.B.A. player to have at least 20 points and 7 assists in each of his first four starts. New York Knicks had a 7–0 record after Lin started receiving major playing time, 6–0 with him starting.

Since Linsanity breakout game through Friday, Madison Square Garden Co., parent of the Knicks, had seen its shares advance 13% since early February, compared with a 4.4% increase of the S&P over the same period.

Nike's short-term investment in Jeremy Lin is ready to pay some long-term dividends. Like a futures bet on a Wall Street stock, the athletic giant had the foresight to sign Lin to a minor deal when he entered the NBA in 2010. Nike extended its endorsement pact with Lin in late February to stop him from being stolen by rival athletic sponsors. Nike then launched “Linsanity” T-shirts for sale at its own stores and at Foot Locker Inc. locations. Nike hopes to double its sales in China to $4 billion annually by 2015.