Like most retail corporates, the $9 billion Southwest Corporate Federal Credit Union announced big July month-end losses, recording impairments on U.S. Central capital and taking write-downs on its own securities investments. Grand total: $178 million net loss for July.The Texas-based corporate had already announced to members that the losses were forthcoming. The communication efforts don't soften the member capital blow. Retail corporates haven't yet applied retained earnings deficits to member capital because they're waiting for final 2008 numbers from wholesale corporate U.S. Central. But as of July 31, Southwest Corporate has a retained earnings deficit of $160.9 million it will eventually record against $393 million in membership capital shares, roughly 41% impairment.Of that, $113 million in losses were due to credit impairments in Southwest Corporate's nonagency residential mortgage-backed security portfolio. Although the accounting entry was made as of July 31, the investment losses were the result of Clayton's second-quarter review and represent credit losses experienced during that quarter.More than two-thirds of write-downs were on previously impaired bonds, according to management's discussion and analysis, available on Southwest Corp's Web site (www.swcorp.org). Like Members United Corporate FCU, Southwest also recorded impairments due to failed monoline insurers Syncora and FGIC. The ratings of another monline insurer, Ambac Financial Group, were downgrade in July by Standard & Poor's, and that could be a sign of future losses to come for Southwest Corp. Ambac represents 42% of Southwest's monoline exposure, wrapping $126 million in nonagency residential MBS.U.S. Central's second-quarter losses accounted for $67.5 million of Southwest's July losses. The retail corporate still has $62 million in MCS remaining at U.S. Central, which could bleed further into Southwest's $232 million in remaining member capital once the retained earnings deficit is rectified.–[email protected]