Nick Gogerty

The Insanity of Holding MBIA Parent Company Credit Default Swaps

Beware the netting exposure.

Whither Municipal Bond Insurance?

the irony in my mind, is that the things that brought problems to MBIA etc. was a failure in correlation products such as CDOs. MBIA itself is a correlation bet that is structured to fail. The occasional muni default wouldn't pose a threat to MBIA, but defualt coverage when needed by the most people will correlate and will cause a payment failure to cover. MBIA itself is the uber structured correlation asset with most exposure in one asset class (US municipal securities). Many purchasers of insurance will likely discover they own the equivalent of the equity tranche of a structured product at a most inopportune time.

Muni Defaults Triple

rising defualts are part of the subprime process. property taxes are a function of rolling 5-7 year assessments in many cases. expect declining taxes to lead to more muni defaults for the next 3-4 years.

Ambak and MBIA Are Back to Their Old Tricks

Nobody ever referred to the Label in the story, but I bet the Emperor's new outfit was size AAA.

Ackman's Proposal for Bond Insurers - Some Thoughts

so what happens to the CDS reference entity? There will be some serious issues here. There is also $42b of re insurance with Channel RE that is could potentially come back to the MBIA books. Which entity gets to keep the offshore steaming pile? This is a tough one.