"Hartford (HIG) is financially strong and well capitalized," Hartford Chief Executive Ramani Ayer said in a statement.

The statement followed an announcement Friday by Fitch Ratings that it was lowering Hartford's default rating to A from A+, and its insurer financial strength ratings of Hartford's primary life and property/casualty insurance subsidiaries to AA- from AA.  Today, Moody's downgraded the company's debt by one notch as well.  "The Hartford's recently released final third-quarter results and continuing weakness in both credit and equity markets have confirmed our concerns," said Jeffrey Berg, Moody's senior vice president, in a statement.

However, Ayer came out swinging in defense of the company's stock, which was crushed on Thursday.

He said should further capital be needed, Hartford would not have to tap public markets during the current credit crisis and instead could use a $500 million contingent capital facility and a $1.9 billion bank credit facility.

This situation highlights the new role of chief executives during this financial crisis.  In times past, executives would let the market sort out a mess like this, where the company's stock is cut in half on false rumors and negative sentiment.  Today, CEO's are forced to come out swinging against a market desperate to hedge their increasingly risky leveraged long positions and looking for vulnerable companies.  In fact, hedge funds and analysts have been very open and obvious about each and every target.

Hartford for almost a month has had a barrage of negative articles and analyst warnings.  Reality doesn't seem to matter when the wolves are surrounding.  They pile on for profit and do not wait for an uptick.

But when the CEO comes out defending, things can change.  It is an important lesson for all companies out there to increase openness and transparency in a time where fund managers are looking for weakness to establish profitable short positions.  Look out for CEO's who are willing to come out swinging and beware of the quiet idealistic ones who believe that the market is ultimately fair.