Today Hovnanian and Standard Pacific’s credit ratings got downgraded.

By itself, it’s no big deal, companies got downgraded all the time. But this time it could be different. Remember, I’ve said that banks have $2.5 trillion of commitments in credit lines and they would be happy to use any formal excuse to cut the credit line for a particular client if they can?

I think there is a very big chance that at least one creditor will pull the credit line from at least one of those homebuilders. If they want to clean the book before the Q1 ends they could do it soon.

I think it’s about time, too many walking skeletons around