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A head of a consulting firm that helps Oracle customers cut licensing deals with the enterprise software giant said Friday that fallout around Oracle's recent earnings announcement could help clients out at the bargaining table.

"If Oracle is posting fantastic numbers and growth, they tend to play hardball," said Ed Ramirez, president of Software Licensing Consultants, a San Ramon, California, firm. "If earnings are weak, perception is weak, that's good for end users and customers."

Oracle said Wednesday that its third-quarter revenues were up 21 percent to US$5.3 billion compared to the same quarter last year. On the surface, the numbers looked strong, especially in light of the widespread malaise in the U.S. economy, but Oracle still fell slightly short of analysts' estimates and its stock dropped in subsequent days this week.

But Eliot Arlo Colon, president and chief operating officer of Miro Consulting, an Oracle license consulting firm in Fords, New Jersey, didn't go quite as far as Ramirez. "It provides notice to clients that there's a weakness with Oracle," he said. "It gets them excited that maybe there's a possibility for a bigger discount. I don't know if that will play to getting huge concessions from them. It's still a case-by-case basis."

For its part, Oracle downplayed the results and said investors could expect a stronger fourth quarter. During a conference call Wednesday, the company president, Charles Phillips, said "a lot of people have annual buying cycles around our Q4. Customers think they're going to get a better deal if they wait until Q4."

But will they? The answer isn't clear-cut, according to Ramirez and Colon.

For example, while there might be a rush of discounting at the end of the fiscal year, it's difficult to predict how much, Ramirez said: "Everything is triggered by sales people not hitting their quota. In turn, their management doesn't hit their number. That is what triggers it– it's not necessarily that Oracle as a corporation says, 'We need to do this.' It's a trickle-up effect."

Ramirez, who worked as an area sales manager at Oracle, added that the company can make concessions to customers beyond discounts, such as on various terms and conditions.

Colon offered a different caution, saying that there's far more competition for discounts during such rush periods.

"It's becoming more public that Oracle only has so much bandwidth to process larger deals at the end of the year. The message coming from Oracle field reps now is, 'Don't wait until the end of May, because I won't be able to get you the aggressive discounts.'"

"Once one big deal closes, a sales team may have hit their number and [other customers] get kicked to the second tier," he added. It might be wiser, he said, to "be the first in line, have a good story and play to the weakness of Oracle, which is that they have so many people waiting until the end of the year."

Nailing down a huge influx of complicated licensing deals can be overwhelming, even for a company the size of Oracle, Colon said. "For the first time this year, I was seeing six-figure deals missing the quarter because there wasn't enough time. That never happened in the past."

However, Oracle's sales representatives on the whole have been hard bargainers recently, Ramirez said.

"With all the acquisitions [Oracle has made] a lot of times they realize, 'Where is the customer going to go? What are their options? Before, there was a lot more competition. That's the attitude. 'Where are you going to go? We've got you.'"

Colon agreed that Oracle's buying spree has changed the landscape, but from a different perspective. His firm is now seeing clients order nothing for several months, but then buying up a slew of products at once.

"I've never seen that take off as much as it has in the last six months," Colon said. "The positioning from Oracle from all these acquisitions is, 'Now is the time to bundle and get all these things together.'"

On the flip side, customers are being emboldened, he said. "I'm seeing people asking for higher discounts and an overall lower price because they're dealing with one vendor."

By Kerry Hannon, Special for USA TODAY Charles Morris, author of The Trillion Dollar Meltdown, isn’t one for sugarcoating. His analysis is dour and grim, but certainly not dull. And when read against a backdrop of an ever-weaker economy, increasingly anxious economists and a stream of gloomy predictions, it can be downright scary.

Morris, a lawyer and former banker who has written 10 books, argues that the subprime mortgage crisis is only a taste of the mayhem that will play out across an array of financial assets.

He lays out the likely course of write-downs and defaults on a whole gamut of assets — residential mortgages, commercial mortgages, high-yield bonds, leveraged loans, credit cards and the complex bond structures that sit atop them. It comes to about $1 trillion, according to Morris. “The sad truth, however, is that subprime (losses he estimates as high as $500 billion) is just the first big boulder in an avalanche of asset write-downs that will rattle on through much of 2008,” he predicts.

He doubts it will be an orderly deleveraging. “There will inevitably be margin calls, panicked selling, clamors from shareholders, and the flight from all risky assets that could double or triple the damage.”

The subject is complex. But for the most part, Morris serves up a sharp, thought-provoking historical wrap-up of the U.S. economy and its markets, along with clear scrutiny of today’s economic woes.

His account runs from the 1950s to the great inflation of the 1970s and traces the financial boom through three critical developments of the 1980s and 1990s — the birth of “structured finance,” the expansion of derivatives markets and the mathematization of trading. All of them flowed together to create the great credit bubble that is now imploding around us, according to Morris.

How did we get to such a place? “The current conservative, free-market cycle that commenced with the Reagan presidency, with all its achievements, seems to have long since foundered in the oily seas of gross excess,” he writes.

But a few years ago, it lurked beneath the surface. “The early 2000s were a nervous, quarrelsome time — terrorism, airport check-in lines, a discouraging war, energy disruption, nasty politics. But to be a banker, or a high-rolling investor was very heaven,” he writes.

He compares the popping of the Japanese asset bubble of the 1980s to events in the USA today. “In proportional scale and market mechanics, it is quite similar to the crisis we are facing now. But the tight network of Japanese government and finance executives chose instead to deny and to conceal, and almost 20 years later Japan still has not recovered,” Morris asserts.

To restore credibility, he declares, “American officials and financial leaders must forthrightly admit the scale of the problem and proceed to purge the absurd valuations, the phony triple-A ratings, the inflated balance sheets, and the hidden liabilities that are marbled through financial balance sheets.”

The cost of not doing so? “The loss of faith in American markets will be far greater than a one-time trillion-dollar asset write-down.”

The sad fact is there isn’t much the Federal Reserve can do now, he contends. He lays blame on former Fed chairman Alan Greenspan. He describes the term “Greenspan put” as commonplace on Wall Street in the early 2000s. “A ‘put’ is an option that allows the owner to sell an asset to some third party at a fixed price, no matter what.” In this case, “no matter what goes wrong, the Fed will rescue you by creating enough cheap money to buy you out of your troubles.”

It’s not a pretty picture. “The ‘wall of money’ that has kept American markets afloat also created a global dollar tsunami that has left a waterlogged world in its wake,” Morris writes.

From his vantage point, those days are kaput. The Fed will have to keep interest rates higher than we would like to avert a currency rout. And with America heading into a recession and a continued collapse in the dollar, that will inevitably trigger price increases in imported goods, much as it is doing in oil, he writes. The credit crunch will have to march its way though the financial markets over the next year or so without “soothing fountains of new dollars coming out of Washington,” he contends.

Morris believes that the 1980s change from a “government-centric style of economic management toward a more markets-driven one” was vital in the American economic upturn of the 1980s and 1990s. But the “breadth of the current financial crash suggests that we’ve reached the point where it is market dogmatism that has become the problem, rather than the solution. And after a quarter-century run, it’s time for the pendulum to swing in the other direction.”

His fundamental solution: After we’ve dug out of our financial markets debacle, “The very first priority will be to restore effective oversight over the finance industry.” Bankers and high rollers take note.

Kerry Hannon is a freelance writer based in Washington, D.C.

To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.

By Steve Friess, Special for USA TODAY Wall Street Journal scribe Christina Binkley was on the scene for a crucial decade of Las Vegas history, chronicling a span during which the popular adult playground transformed itself from a crass theme park of resorts into a world-class destination run by conglomerates.

In Winner Takes All, Binkley writes what could be a doctoral dissertation on Vegas and the gambling beat. Binkley worked her sources up and down the Las Vegas Strip to craft a compact, informative and entertaining story.

Unfortunately, the book may be mistitled inasmuch as there was no ultimate “winner” in Las Vegas.

Binkley has the ability to simplify the machinations behind high-profile corporate buyouts. Readers get a backstage pass to view three important buyouts: Kirk Kerkorian’s 2000 purchase of Steve Wynn’s Mirage Resorts; MGM Mirage’s 2004 buyout of Mandalay Resort Group; and Harrah’s 2004 takeover of Caesars.

Binkley shines new light on an old story, revealing that Wynn forced Kerkorian’s MGM Grand, which acquired Mirage Resorts, to pay $17 million for his residence, including a pair of decorative frogs for $766.09 and a 10-year-old garbage disposal for $287.04.

Competitive tussles

Binkley calls Winner a Wynn biography masquerading as a book about the competitive tussle reflected in the subtitle: Steve Wynn, Kirk Kerkorian, Gary Loveman and the Race to Own Las Vegas.

Wynn, developer of the Mirage, Bellagio and Wynn Las Vegas, is seen as filled with contradictory traits. In anecdote after anecdote, Binkley illustrates his magnanimity, egotism, eloquence, weirdness, humor, insecurity, pettiness. The fact she had terrific access to him did not tilt her evenhanded portrayal.

At times, she is deliciously dishy in a way that is unlikely to get another interview, as when she implies Wynn had cosmetic surgery.

If there is a bias here, though, it’s toward those who gave Binkley access. Wynn did, so he occupies most of the book. Loveman granted her less, so he is depicted as the dull, underestimated yet brilliant operator of Harrah’s whose staff worries about his girth.

MGM Mirage CEO Terry Lanni gave no face-to-face access. Consequently, his role in mergers on his watch is treated dismissively.

Kerkorian is an exception; she treats him fairly even though he gave her no access, perhaps because the 90-year-old mogul hasn’t given an interview in many years.

But Binkley’s most alarming failure is that she ignores the crucial role in the past decade of Wynn’s chief rival, cantankerous Las Vegas Sands CEO Sheldon Adelson, with whom Binkley had a notoriously poor relationship.

Adelson is even wealthier than Kerkorian and runs the Strip company with the highest market value, a result of his vision to turn Vegas into the top convention town and his aggressive approach to Macau and Singapore. Yet he is mentioned only about half a dozen times. Wynn’s story is hardly complete without fleshing out his rival. Books could be written about the juicy, extremely public Wynn-Adelson feud.

Historical trivia

The book is marred by some mistakes. Binkley misspells the name of impressionist Danny Gans (she wrote Ganz), who grins from the largest marquee on the Strip. She misstates the marketing slogan as “What Happens in Las Vegas Stays in Las Vegas” even though the official catchphrase doesn’t mention the city name.

And she is wrong about the chronology of Wynn’s optioning the musical Spamalot, saying he did so after the failure of Avenue Q, when, in fact, he did it before Q opened in Vegas.

That said, Binkley provides plenty of insider detail and historical trivia to satisfy Vegas enthusiasts. And she can turn a phrase. Explaining why Vegas moguls don’t actually regard it as home, she writes: “It’s hard to love a place that tries so hard, yet can’t respect itself — like the class slut.”

Happily, Binkley does respect the city she watched prosper. Thus, she taps years of serious coverage to write a pleasing, if flawed, book.

Steve Friess is a freelance writer based in Las Vegas and co-host of the weekly Vegas celebrity-interview podcast The Strip.

To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.

If your diet consists entirely of bacon, you probably haven’t noticed that food prices in the United States are rising. Practically everything else is going up, and the respite for lovers of pork bellies is temporary.

Last week, the American Farm Bureau Federation, an organization of farmers and ranchers, announced the results of its quarterly Marketbasket Survey, and the outlook for producers and consumers is not great.

Every quarter since 1989, the federation as conducted an informal survey to determine the price of a basket of 16 basic food items an average American would purchase at a local grocery store. A 20-ounce loaf of white bread, a 32-ounce bottle of vegetable oil, a gallon of whole milk and one pound of pork chops are among the items surveyed.

Thursday’s report for the first quarter of 2008 saw an increase of $3.42, or 8.2%, to $45.03, from the previous quarter. The same standard bag of groceries was 8.9% more expensive than it was in the year-earlier quarter.

“Overall changes in retail food prices highlight that the United States food market is more greatly tied to the global situation and global markets than ever before,” said Jim Sartwelle, a federation economist.

An increasing demand for biodiesel, particularly in Europe, is driving price increases in all vegetable and animal-derived fat products, Sartwelle said. “If you are a consumer and you need Mazola for cake mix, at some level you are competing with biodiesel users somewhere else in the world.”

Runaway energy costs also help to drive up food prices. “Use of natural gas and diesel fuel in the production, packaging and transportation of goods from farm to table has exploded,” Sartwelle continued. “It’s all tied in to crude oil prices.”

Farmers say they are getting squeezed by high costs while not fully benefiting from rising prices to consumers. Food today goes through more processing and heavier “convenience” packaging than it used to, so the value-added returns accrue back to the processor, not the farmer. A bag of boneless, skinless chicken breast understandably returns a lower percentage of profit to the farmer than a whole chicken would.

According to the farmers’ group, 30 years ago “farmers received about one third of consumer retail food expenditures.” Now they see closer to 22%.

According to the survey, the most significant retail price increase for the quarter was 69 cents, or 40.6%, to $2.39 for a five-pound bag of flour. A dozen eggs saw the largest year-over-year increase, rising 65 cents, or 43.1%, to $2.16, the survey reported. (See Why Your Wallet Feels Thinner).

The retail price for one pound of bacon is the only item in the survey that saw no change in the quarter, maintaining its $3.35 price point. In fact, the survey reported prices of bacon and pork chops have actually gone down year over year, 2.6% for 1 pound of bacon and 2.9%, to $3.31, for apound of pork chops.

Neil Dierks, chief executive officer of the National Pork Producers Council, said that “in recent years pork producers saw improved herd health and increased herd size, in part from imported live animals from Canada.” Then last year, producers began reporting financial reversals as feed prices rose. It takes nine to 13 months to reduce herd size, Dierks said, and producers only started that reduction in the last few months. As a result, there is an ample supply of pork keeping the price for consumers very affordable.

Dierks predicted that consumers will start to see increased pork prices by the end of this year.

Late Slide Could Rule Out March Gain

On The Move: Citigroup

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It may not be healthy, but Thornburg Mortgage seems to have something on the order of nine lives. The troubled mortgage firm’s creditors have given it a third extension of time to raise $1 billion or so of capital and stave off bankruptcy proceedings.

Late on Friday, Thornburg (nyse: TMA - news - people ) announced it had received a second extension for its second plan to raise funds, this one a private placement of up to $1.4 billion of seven-year notes with an initial interest rate of 18%. If the firm convinces most of the holders of its preferred stock to trade in their shares for a fifth of face value, the rate on the notes will fall to a more manageable 12%. (See “Thornburg Mortgages Its Future.”)

Thornburg now has all of Monday to sell the notes. It previously failed to raise $1 billion through a public sale of convertible notes with an interest rate of 12%, apparently because few investors were interested. It then switched to the private placement, which was supposed to be closed on Thursday, but it received two one-day extensions from counterparties in reverse repurchase transactions who are willing to ease the terms of their loans if Thornburg can raise at least $948 million in new capital.

While the extension shows that the creditors are willing to work with Thornburg, it is having trouble finding people to buy its bonds, even at the hefty yields it is proposing. Thornburg has previously said distressed securities specialist MatlinPatterson Global Opportunities Partners would pick up $450 million worth of the notes.

It probably makes sense for the short-term creditors–Bear Stearns, Citigroup, Credit Suisse, Royal Bank of Scotland and UBS–to try to keep Thornburg out of bankruptcy. All of those firms have had problems emanating from the subprime mortgage crisis in the U.S. In the case of Bear Stearns, the troubles were fatal. (See “JP Morgan Sweetens Deal That Is Still Sour For Bear Investors.”)

Whatever the outcome, Thornburg’s common shareholders will be left with little to show for their investments. The new notes and other financing machinations could result in the issuance of warrants that would give their holders 90% of the company’s equity, severely diluting the holdings of existing shareholders. In after-hour trading on Friday, Thornburg shares fell to $1.35. That’s down from a high of $28.40 in May, before the subprime crisis began to pummel the company’s shares.

Thornburg specialized in jumbo mortgages, those too large to be securitized by the government-sponsored Fannie Mae and Freddie Mac. As a result of the subprime mortgage crisis, its portfolio of adjustable-rate jumbo mortgages lost value, and lenders issued margin calls that it was unable to meet, leading to its current liquidity crisis.

Late Slide Could Rule Out March Gain

On The Move: Citigroup

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NEW YORK (Reuters) -Stocks may struggle to make headway next week, with jobs data expected to provide more evidence of recession and more companies likely to revise their guidance as the earnings reporting season approaches.

Investors will also keep a close eye on the credit markets to determine if the Federal Reserve's actions to provide liquidity are taking effect, said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

But, he said, after the near collapse of Bear Stearns Cos Inc (BSC.N), any evidence of similar issues at another bank could lead to a sharp sell-off.

"There's not likely to be a clear-cut trend next week," Praveen said. "We're still in that high volatile period where we have various cross currents. On the negative side will probably be the macro data and news on banks, and on the positive side, any signs the Fed's actions are bearing fruit."

The economic highlight of the week is Friday's jobs report. U.S. employers are expected to have cut payrolls for a third straight month during March. Economists polled by Reuters estimate a reduction of 58,000 jobs.

"I wouldn't be surprised to see a deep negative number, and that will be the final nail in the coffin for the people who are not sure if we're in a recession," said Barry Ritholtz, director of research at Fusion IQ, an investment firm in New York.

"My sneaking suspicion is that we're in the early stages of a recession and that this will be a deeper and longer one than in 2001."

More clues on the state of the economy and the outlook for interest rates could come on April 3, when Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson testify before the Senate.

By Friday's closing bell, the three major U.S. stock indexes turned in a mixed performance for the week: The Dow Jones industrial average (.DJI) fell 1.2 percent and the Standard & Poor's 500 Index (.SPX) slid 1.1 percent, while the Nasdaq Composite Index (.IXIC) edged up 0.1 percent.

EARNINGS LITE

With the first-quarter earnings reporting season fast approaching, a number of companies may begin revising their earnings guidance next week, said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

"The estimates for S&P ex-financials for the first quarter are a little high, I think, and I'm not so sure they're going to hit those targets," he said.

"Now would be the time to come forward."

On Friday, retailer J.C. Penney Scheduled earnings releases are few and far between next week. Fourth-quarter results from retailer Best Buy Co Inc (BBY.N) on Wednesday could provide further clues on the outlook for the sector. Agricultural biotech company Monsanto Co (MON.N), which this week raised its fiscal 2008 earnings forecast citing strong demand for corn seeds, will likely be a bright spot. Monsanto reports earnings on April 2.

ISM FACTORY, SERVICES DATA ON TAP

Apart from the jobs report, the week's economic data includes a pair of reports on the economy from the Institute for Supply Management. On Tuesday, the ISM's report on U.S. manufacturing conditions will be released. The median forecast of economists polled by Reuters for the ISM's manufacturing index is 47.4, down from 48.3 in February.

The ISM report on the service sector of the economy is scheduled for Thursday, with economists expecting a reading of 48.3 in March, down from 49.3 in February.

Battipaglia noted that as the market is expecting a weak reading, the number probably will not move the stock market unless it is a positive surprise.

Factory orders for February and revised durable goods orders for February are due on Wednesday; the March Chicago PMI (purchasing managers' index) is due on Monday.

(Wall St Week Ahead runs weekly. Any questions or comments on this column can be e-mailed to: kristina.cooke(at)reuters.com)

(Additional reporting by Jennifer Coogan)

Samsung lowered its annual sales forecast Friday, blaming a low dollar, high oil prices, and softness in the semiconductor market.

In January, Samsung projected more than 15% annual sales growth, based on demand for flat-screens, high-end mobile handsets, and possible improvement in the "collapsed" memory chip market.

"We will increase our global sales by over 10% this year from the previous year," said Samsung CEO Yun Jong-yong, in a statement. He did add that profit for the year is expected to be higher than last year as the company focuses on its four key businesses: semiconductors, mobile handsets, LCD panels, and TV sets. Samsung also claims to be the world's largest chipmaker; it is the world's second largest mobile phone maker with about 13% of the market, according to recent Gartner figures. Nokia's the largest at 40%; Motorola is third with about 12%.

Samsung's reduced forecast is just the latest sign that mobile phone makers are feeling the heat of a roiled global economy. Sony Ericsson lowered its quarterly forecast 10 days ago; Mitsubishi said in early March it is withdrawing from the mobile phone market entirely.

In its last fiscal year, Samsung reported 7% sales growth, with revenues of 63.18 trillion Korean won ($63.6 billion) last year with a net profit of 7.43 trillion Korean won ($7.48 billion).

With its diverse holdings, the company noted that its semiconductor business has been hardest hit, and that weakness there may reduce profits from its flat screen and mobile handset businesses. "The price of DRAM chips, which was expected to recover this year, is still in the doldrums, showing no signs of recovery," Samsung said.

See original article on InformationWeek.com

By Vinnee Tong, AP Business Writer NEW YORK — A Delaware judge ruled Friday in favor of IAC Chief Executive Barry Diller in a dispute with Liberty Media that could help to determine the fate of the company.

A judge decided Liberty had failed to prove Diller violated an agreement between them by pursuing a plan to break the IAC/InteractiveCorp Internet conglomerate into five parts. Vice Chancellor Stephen Lamb of the Delaware Chauncery Court ruled that Diller isn’t required to get Liberty’s approval for splitting up the company.

New York-based IAC owns such brands as Ask.com, Match.com, Evite and Citysearch.

Diller announced plans in November to spin off its HSN home shopping network, Ticketmaster, LendingTree.com and Interval time-share businesses.

Liberty Media owns about 30% of IAC’s equity but controls about 62% of the voting power because of a dual-share structure. Diller has controlled Liberty’s votes for years, under an agreement between the two. Liberty sued to reclaim those voting rights, since it claims that Diller gave them up when he went against Liberty’s will in pushing the breakup.

Lamb said in his opinion that Liberty did not have the right to prevent the spinoffs just because they called for a single-tier voting structure. However, he said it was too early to decide whether IAC directors met their fiduciary duties since they had not yet fully approved the plan or its details. Lamb wrote that he would reserve judgment on that until a later date, if needed.

Earlier this month, Liberty lawyer Kevin Abrams suggested that Diller was trying to rid himself of Liberty’s influence and strengthen his control of IAC.

Liberty attorneys accuse Diller of threatening a single-tier voting structure in the spinoffs to force Liberty to swap its IAC shares for certain assets, which could include one of the spinoff companies. In that case, Diller could convert his single-vote shares into Liberty’s more powerful shares, leaving him with a majority interest.

Diller, who is legendary for rising from the mail room of a top Hollywood talent agency, said at the time that he had enjoyed being on the stand.

“I wish this hadn’t happened, but it did,” Diller said through a spokeswoman on Friday. “Now it’s over and we can all get on with our work and lives.”

IAC shares rose in after-hours trading. The shares had fallen 27 cents to $20.49 in regular trading on Friday. Liberty Media shares fell in after-hours trading after rising 35 cents to $22.90 in regular trading.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.

It may well be darkest before the dawn, but for MGIC Investment, that seems pretty dark. The mortgage insurer’s stock hit a 52-week low on Friday, but it seems to have successfully raised more than $800 million of new capital.

On Friday, MGIC Investment (nyse: MTG - news - people ) announced that it has completed the public offering and sale of 42.9 million shares of its common stock for $483 million. Bank of America Securities acted as underwriter for the offering and it fully exercised its option to purchase additional shares. The company also completed the sale of $365 million worth of 9% convertible junior subordinated debentures due 2063.

The debentures will be convertible at an initial conversion rate of 74.0741 shares per $1,000 principal amount of debentures, or $13.50 per share. That represents a 20% conversion premium to the $11.25 per share price to the public in MGIC’s concurrent common stock offering.

Investors were not excited about the dilutive offering or the long-term loan; the company fell 6.5%, or 7 cents, to $10.04 and touched a 52-week low of $9.60 during the day.

The two fundraising transactions follows a downgrade by Moody’s citing the investment company’s rising level of debt to its equity. (See: ” Moody’s Downgrades MGIC”)

A spokesperson for MGIC’s Investment outfit told Forbes.com Friday that Moody’s downgrade will not affect MGIC Guarantee Insurance’s ability to insure loans explaining that Moody’s differentiated between the Milwaukee-based parent company, which is deep in debt, and its debt-free loan-insuring subsidiary.

James Brender, an analyst with Standard & Poor’s, agreed that downgrade won’t necessarily affect the mortgage insurance company’s ability to do business but for a different reason. Brender said that most of MGIC’s insurance business is headed to Fannie Mae and Freddie Mac, which recently lowered standards for mortgage insurers they work with. Previously, the government-sponsored housing agencies required insurers to be rated double-A-minus or better.

The influx of cash from the stock offering will also help the loan insurance business because MGIC Investment is only keeping $88 million of the money it raises and it will give the rest to its various subsidiaries. The mortgage insurance unit will probably need the cash. It expects claims to be between $1.8 to $2 billion in 2008.

On Monday, MGIC Chief Executive Curt S. Culver said he would personally purchase 25,000 shares of the common stock through the public offering.

Late Slide Could Rule Out March Gain

On The Move: Citigroup

Read All Comments var url = “2008/03/25/mgic-offering-downgrade-markets-equity-cx_md_0328markets43.html”; if(validStoryForRating(url)) { if(typeof rtsUtil==”object” && typeof rtsUtil.addRts==”function”) rtsUtil.addRts(”fdcrtsid”,{comments:true,rate:true,source_type:”story”,source_id:”2008/03/25/mgic-offering-downgrade-markets-equity-cx_md_0328markets43.html”,z:”1″,op:”init”}); } else { document.getElementById(’fdcrtsid’).style.display = ‘none’; } function validStoryForRating(url) { var yearIsPost2005 = yearIsPast2005(url); if((url.indexOf(”feeds/”) != -1) && (url.indexOf(”/hscout/”) != -1 || url.indexOf(”/ap/”) != -1 || url.indexOf(”/options/”) || url.indexOf(”/afx/”) != -1)) { if(yearIsPost2005) return true; } else if(url.indexOf(”lists/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”global/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”fyi/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”forbesglobal/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”forbes/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”video/”) != -1) { if(yearIsPost2005) return false; // video not rated YET } else if(yearIsPost2005) return true; // default story post 2005 else return false; return false; } function yearIsPast2005(url) { var parts = url.split(”/”); for(var i = 0; i = 2005) return true; } } return false; }

Perhaps loan specialist Thornburg Mortgage hopes that by ignoring the problem it will simply go away.

On Friday beleaguered Thornburg Mortgage (nyse: TMA - news - people ) announced a one-day extension of its agreement with creditors, previously scheduled to expire at 5:00 New York time on Thursday. The deadline passed without an announcement from the residential mortgage lender on the deal’s status. Phone calls and messages to Thornburg for comment went unanswered.

Thornburg is trying to sell a bond issue that will give it enough capital to satisfy its short-term lenders and keep it out of bankruptcy court while it rides out the credit-crunched upset in the U.S. mortgage market.

“Since the other deal was terminated, and now we’ve got this other deal and they need extra time, it doesn’t make me feel particularly optimistic that they’re getting the deal done,” said Jason Arnold, an analyst at RBC Capital Markets.

Investors seemed optimisitic, bidding Thornburg’s shares up 11.5% during Friday’s trading. On the other hand, that brought its stock price to all of $1.65, a 17-cent gain, as most of its equity value has been extinguished over the past year.

On Tuesday, the company announced it would commence a private placement of up to $1.4 billion of seven-year senior subordinated secured notes with an interest rate of 18.0%, which could be knocked down to 12.0% if the company is able to buy in most of its preferred stock at a fifth of its face value. (See: “Thornburg Mortgages Its Future”)

That deal replaced a previous plan under which Thornburg tried to raise about $1 billion in a sale of convertible notes with an interest rate of 12.0%. That offering was apparently not sufficiently attractive to potential investors.

Late Slide Could Rule Out March Gain

On The Move: Citigroup

Read All Comments var url = “2008/03/28/thornburg-mortgage-closer-markets-equity-cx_cg_mlm_0328markets46.html”; if(validStoryForRating(url)) { if(typeof rtsUtil==”object” && typeof rtsUtil.addRts==”function”) rtsUtil.addRts(”fdcrtsid”,{comments:true,rate:true,source_type:”story”,source_id:”2008/03/28/thornburg-mortgage-closer-markets-equity-cx_cg_mlm_0328markets46.html”,z:”1″,op:”init”}); } else { document.getElementById(’fdcrtsid’).style.display = ‘none’; } function validStoryForRating(url) { var yearIsPost2005 = yearIsPast2005(url); if((url.indexOf(”feeds/”) != -1) && (url.indexOf(”/hscout/”) != -1 || url.indexOf(”/ap/”) != -1 || url.indexOf(”/options/”) || url.indexOf(”/afx/”) != -1)) { if(yearIsPost2005) return true; } else if(url.indexOf(”lists/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”global/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”fyi/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”forbesglobal/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”forbes/”) != -1) { if(yearIsPost2005) return true; } else if(url.indexOf(”video/”) != -1) { if(yearIsPost2005) return false; // video not rated YET } else if(yearIsPost2005) return true; // default story post 2005 else return false; return false; } function yearIsPast2005(url) { var parts = url.split(”/”); for(var i = 0; i = 2005) return true; } } return false; }