Ambac Financial Group Inc. (ABK)

All Comments on ABK

  • commenter
    eric2802000
    Sep 21 08:50 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    It's a ploy by Buffet to gain market cap. It's as easy as that. And Michael, when you say, "... any company whose business model depends on maintaining a certain debt rating has a fatally flawed business model", tell that to Google when they rate your website and articles. Are they not a rating agency? If you want to go by that rationale then your business model is flawed as well. Reply
  • commenter
    warren's
    Alter Ego
    Sep 21 08:22 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    I bought ABK last Friday since the Possible Downgrade will likely NOT occur for a few reasons:

    1) The new bailout greatly reduces the likelihood of forced bank takeovers of underpreforming mortgages. Why force a homeowner out and sell the property to recoup your loan when you can sell tyhe mortgage to the new bailout fund (at a loss) much faster and easier.

    2) The bailout gives ABK MBI RDN & PMI etc. a longer time window to either work things out or prevent (or cure) defaults. Instead of a few months I think they will have as much as 3 years before a payout happens;

    3) Time is the friend of an insurance company since their investment portfolios generate steady Government bonds returns while the market stabilize.

    4) More Government plans are coming such as allowing foreigners an Entry Visa if they come to the US and buy a property;

    5) The short selling rules will almost certainly be extended through election day.

    6) the government(rightly or wrongly) wants to blame short sellers and look for aggressive prosecution of those hedge funds and traders that break the short selling rules (K Fine on Fast Money said she would continue to short...watch for the FBI on her doorstep soon).

    7) S&P is under pressure to review all pending downgrades in light of the new bailout restructurings and they don't want to be seen as pushing a company over the edge.. They are already in hot water on many downgrades based on nothing other than the stock price of the issuer...they have a lot of litigation coming their way...

    8) Ambac has a lot of options and a large investment portofolio and are fighting back.

    Reply
  • commenter
    trendsrus
    Sep 21 07:09 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    Mike,

    You miss the big picture. IF what ABK insusre is worth less THEN the companies that hold such paper have big problems AND even bigger problems IF ABK goes down the tubes.

    The "flawed business model" is self correcting as should be self-evident by the simple fact that Mood'ys raised the ratings they now may lower again. AND then we will see the companies that hold such paper make deals again effectively once again prompting Moody's to raise the ratings.

    It should be self-evident that the only "flawed business model" is the one of Moody's who is an irrelevant bystander practicing voodoo rating and attempting to vicariously run the business' of others. Moody's is a day late and a dollar short and should be put out of business AS thier only a necessary evil -a leech imposed by Government that serve no purpose and add no value...     Reply
  • commenter
    TomArmistead
    Sep 21 06:45 PM
    My Website
    Ambac Collapse: Anticlimax of the Week [view article]
    Maybe George Bush would tell them, "Heckuva job, Moody's." Reply
  • commenter
    User 112599
    Sep 21 06:28 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    It seems that nobody, here or on other sites that I've checked, are speaking warmly FOR or agreeing with and thanking all the Moody's men for doing such a good job... Reply
  • commenter
    boywisden
    Sep 21 06:15 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    Email to Moodys I sent todayabout ABK/MBI rating review. If you agree circulate this and try to put public pressure on Moodys.

    "Clearly, regardless of whether Moodys or the companies were correct last Thursday, the situation has changed with the announcement of the Federal Government's $700 billion plan to buy residential MBS from financial institutions.
    The pertinent question now is this: had Moodys not made the announcement last Thursday, would it do so today and would it mention the possibility of a multi-notch downgrade?
    If the answer is no, will Moodys withdraw the review?
    If the answer remains yes, can Moodys explain why that is so?
    The US - and hence global - financial system was severely in jeopardy last week, leading to the Government's announcement on Thursday, ironically just hours after the announcement by Moodys. The financial system now needs a period to recuperate. I am not, of course, suggesting that Moodys does something it feels is not justified, but in the new circumstances would it not be reasonable for Moodys to announce that it is suspending the downgrade review until such time as the results of the Government's plan are clearer?"
    Reply
  • commenter
    james shaw
    Sep 21 05:56 PM
    My Website
    Ambac Collapse: Anticlimax of the Week [view article]
    I totally agree that the ratings should be suspended for the time being.

    I also question on the timings of the possible downgrade bu Moody's.

    ABK stock is heavily shorted. The news that the government will ban shorting selling for the time being resulted in the big rally on ABK.

    ABK stock is clearly manipulated.
     Reply
  • commenter
    SaudiMail
    Sep 21 04:37 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    The rating agencies were responsible for the original AAA ratings of the loans, CDO's and bonds purchased by financial institutions. This junk was purchased and premiums charged on the basis of these ratings. Therefore, when the ratings turn out to be flawed, it is the likes of Moody's who should be compensating the institutions who bought them on the basis of their 'expert opinion'.
    These same agencies who sold junk in the guise of AAA packages then have the cheek to downgrade the institutions who were foolish enough to trust the rating agencies.
    The rating agencies are a major cause of the current financial problems, they should be suspended and have their assets seized until the outcome of a full federal investigation has been concluded.     Reply
  • commenter
    Owen
    Sep 21 04:30 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    Michael,

    You claim that "any company whose business model depends on maintaining a certain debt rating has a fatally flawed business model to begin with." But tell me, would you buy life insurance from a company you suspect might not outlive you?

    Every insurance company on earth depends on its credit rating for survival. No insurer can possibly cover a worst-case scenario in which all claims arrive at once. The days when an insurer's assets could have covered all possible underwritten claims have ended about 300 years ago.
     Reply
  • commenter
    Old Coach
    Sep 21 04:20 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    The only question that matters now is how the new bailout will impact ABK and MBI. If the government is going to buy up all of the toxic paper, does that take the insurers off the hook? If their off the hook, how could they be downgraded? It would seem an upgrade would be logical. Reply
  • commenter
    SaudiMail
    Sep 21 04:19 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    May 1 (Bloomberg) -- Billionaire Warren Buffett's Berkshire Hathaway Inc. faces a probe by Connecticut's attorney general for possible conflicts created by owning almost 20 percent of credit ratings company Moody's Corp. while also running a new municipal bond insurer.

    Connecticut is investigating the ``clear and direct conflict of interest for Moody's to rate a company owned by such a significant Moody's shareholder,'' Attorney General Richard Blumenthal said in an interview.

    Moody's gave its top rating last week to Berkshire Hathaway Assurance Corp., created in December as existing bond insurers struggled to maintain their AAA ratings. A favorable rating for Berkshire by New York-based Moody's, or a lower rating for competitors including MBIA Inc. and Ambac Financial Group Inc., may give Buffett's company an advantage.
    Reply
  • commenter
    SaudiMail
    Sep 21 04:12 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    The recent hijacking of ABK by Moody's and unknown third parties,
    however, violates the integrity of the art of trading equities, and I
    feel the need to voice my concerns.

    There is a story in a stock's movement that often tells who is doing
    what, and, in retrospect, for what reasons. In the four months I have
    been trading bond insurers, I have developed an understanding of how
    institutional traders enter, exit, and manipulate various insurers. It
    is this experience, combined with a review of MBI's trading patterns
    between the hours of 9:30 and 11:30 am that leads me to believe that
    ABK is being manipulated. For what reasons I don't know, but when
    upwards of $300,000,000 is being so carefully moved through Ambac's
    market, an alarm should be sounded in every trader's mind.

    As you all know, (or should know), Short-selling of ABK's shares has
    been temporarily banned. Yet, the steady downward movement of trading
    in Ambac reflects not the free-fall of MBI between 9 and 11 am, but
    the contrived downward pressure that is reminiscent of one of the many
    bear raids - scars of which I bare - that has comprised Ambac's
    trading activity since July. Traders are effectively selling Ambac
    short through the exercise of options puts that allow them to
    simultaneously buy and sell shares at progressively lower prices,
    without the obligation of having to buy them back. There are problems,
    however, with the theory that Moody's et. al. have in mind a goal of
    destroying ABK through the depletion of shareholder value.

    Unlike Lehman Brothers, Ambac cannot be forced into insolvency by the
    ruthless destruction of its market cap. This is a company that has
    seen the value of its shares plummet to $1.04; if bankruptcy was to be
    declared, it would have happened then. Rather, Ambac can only be
    materially effected by the lowering of its ratings, which would
    require it to post capital to cover additional obligations. Whether
    Moody's is saber-rattling or not, I cannot tell, and for that matter,
    don't believe anyone else can either, but in all probability, the Fed,
    Congress, and the Treasury will likely push through legislation soon
    allowing the government to effectively sanitize the balance sheets of
    banks. For Moody's to threaten a ratings downgrade under such dubious
    reasons as the possible further deterioration of its mortgage
    portfolio sounds shaky given recent developments, But I don't know.
    Maybe Moody's knows something I don't.     Reply
  • commenter
    glassbox
    Sep 21 03:43 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    Moody's and S&P's business model is premised on the fact that the market will buy and believe their ratings. What they have done in the last one year is basically to negate the trust that the market has with them - firstly by overrating what was not worse credit and then at the bottom of the crisis, to keep moving the goal post downwards.

    With the current state of affairs, the problem is not with collateral posting, the problem is 'who can you trust'? At the end of the day, what is called to question is the integrity of the management running the companies and the integrity of the market system allocating the capital. I must say at this point, the latter is sorely lacking.

    Ask most of the management of the companies (other than the wall street investment banks which I have a different issue with) - I think they are working harder than anyone to restore any semblance of stability and trust in their operations. Yes, perhaps some of the mistakes were their undoing but I think the fact remains that they were operating under an environment that have certain assumptions which are now being severely challenged. The job of regulators is to ensure that systemic risks like what we are seeing now do not go out of hand and creates a self fulfilling prophecy of downward spiral to be taken advantage of - sadly, all that neglect of this objective is now coming undone.

    Come on, stop putting the sole blame on management for what on hindsight looks like a flawed business model. Going by the number of requests of companies who were not included in the SHO list requesting to be put on it just shows that there is something very flawed with the system in which the market operates, perhaps more so than the business model the company is operating with.

    ABK collapse is really one worst case depiction of the failure of the system - at this point, can one really say they 'trust' Moody's downgrade?? I am actually more prepared to trust the management as they have demonstrated positively trying to recover my money. I don't have the answers cause the whole thing baffles me. I certainly hope that the market is capable of coming to its senses and logic in the midst of all that fear, mistrust and uncertainty.     Reply
  • commenter
    Ishortyou
    Sep 21 03:27 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    I agree with Tom, the rating agencies should be irrelevant and should be suspended from rating untill the market stabilizes, the rating of the insurers should be dictated by the market itself and by other models because the current one obviously is not working well. The reckless prior downgrade of AMBAC and MBIA already had triggered massive sell off of municipal securities freezing the muni market to the point that lead to the auction rate securities crisis, massive write down of banks and brokers and bankruptcies, one more notch will cause certainly a lot of problems in addtition to the exisiting ones and that is not going to be pretty. Reply
  • commenter
    daveddawg
    Sep 21 03:23 PM
    Ambac Collapse: Anticlimax of the Week [view article]
    The simple solution would be for the SEC to prevent any ratings agency from issuing a downgrade on any of 800 financial stocks until at least 2 Oct. Upgrades OK. Maybe they should extend it further if needed. Reply
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