Radian Group Inc. (RDN)
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RDN Forum Topics
- All Comments on RDN
- General Discussion on RDN
- Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
- Financials and Housing: The Outlook Remains Ugly [view article]
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loading ...Recent RDN Articles
- Risk/Reward Analysis Makes Financial Insurers a Buy
- Financials and Housing: The Outlook Remains Ugly
- Subprime Crisis Drags On [Housing Tracker]
- Best and Worst Performing Stocks Seven Months Into 2008
- Interpreting the Mark-to-Market Losses of Monolines
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General Discussion on RDN
Does anyon have any comments on the recent activity of the feds? ReplyRisk/Reward Analysis Makes Financial Insurers a Buy [view article]
I own ABK calls, and was up 133% today on them (in 1 day). I sold half the position, and kept the paper profits in the there for future upside. ReplyFinancials and Housing: The Outlook Remains Ugly [view article]
Have to be more than a couple of nervous shorts out there tonight! These next few day should be interesting. Enough said... ReplyFinancials and Housing: The Outlook Remains Ugly [view article]
Did Bill Ackman tell Whitney to write this? Tilson is a genius, how he gets investors into T2 when this guy just copies the work of his buddies is amazing. His "research" is lifting work from Amherst Sec or just echoing what Ackman, Einhorn, and his other real investor friends say and tries to get into that circle... ReplyRisk/Reward Analysis Makes Financial Insurers a Buy [view article]
Ambac is domiciled in Wisconsin and would fall under the supervision of Commissioner Sean Delwig if it became insolvent. Insurance has its own accounting system, the so-called statutory accounting, which does not consider mark to market losses. Ambac is strongly capitalized by statutory standards and Delwig has said as much publicly.As of 6/30, Ambac's statutory Surplus as regards policyholders was 3.45 billion: adding the Contingency reserve of 3.26 billion, Qualified Statutory capital stood at 6.71 billion compared to GAAP shareholders equity of 1.9 billion. Delwig would look at statutory figures rather than GAAP.
So, even if Ambac's GAAP shareholders equity were for example negative 300 million, which many would consider to be insolvency, from a statutory point of view they would still be OK.
I think the danger of statutory insolvency is extremely remote.
On Aug 27 02:25 PM dhart wrote:
> My comment is for Tom. From what I understand about insolvency as
> it relates to the insurers, they would need to present a plan to
> Dinallo about how they are addressing the situation. Meanwhile, they
> will still be earning a lot from their embedded book of business
> correct? In other words, say they have more liabilities than assets
> by 300 million....this could reverse very easily could it not? Not
> sure what the procedures are but as long as they can weather the
> storm, this seems like a no brainer. Thank You!
>
> I own ambac Reply
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
My comment is for Tom. From what I understand about insolvency as it relates to the insurers, they would need to present a plan to Dinallo about how they are addressing the situation. Meanwhile, they will still be earning a lot from their embedded book of business correct? In other words, say they have more liabilities than assets by 300 million....this could reverse very easily could it not? Not sure what the procedures are but as long as they can weather the storm, this seems like a no brainer. Thank You!I own ambac Reply
Financials and Housing: The Outlook Remains Ugly [view article]
How tiresome, how many times can you beat the same dead horse. We all know the housing sector is a disaster, that lending standards went to pot and that financial institutions have piles of bad debt. This is all true and obvious, but at current prices shorting FRE and FNM is probably one of the stupidest ideas ever. If you've shorted these stocks from 30, 40, 50 down any sensible person would declare victory and move on. The govt isn't going to let these institutions fail which means the only way you win is through nationalization or a super-dilutive capital addition. Any scenario that is only mildly dilutive, a convertible pfd or some sort of warrant-type Chrysler bailout or God forbid they muddle through with no bailout and you're toast. Yes, the news flow is horrible but the political realities and risk/reward balance weigh heavily against you. To make this bet you have to have a level of certainty that just can't exist where the government is involved. As smart as Tilson is I can't believe he's doing something this dumb. ReplyTipaldi
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
Yeah, sure! Who needs cash?Going back ten years ando more, almost every insurance company has delivered tons of free cash, EVERY YEAR, with high and low of course, but never presented a cash loss. That time span includes catastrophes like 9/11 and 2005 hurricane season. Some others have had cash burned one or two years, but still a little part of what they delivered before and after those years.
I don't think it will be that much different for financial insurers. They will probably burn some cash in the next few years, but their current stock prices more than discount those losses, which moreover I expect to be much less than it's currently assumed.
By the rest, there's no better contrary move than going the other side of what the rating clowns say. Reply
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
Free cash flow is a largely meaningless term for an insurance company. They write insurance and collect CASH long before LOSSES cost cash. The bad business written in the last few years will be costing cash for the next 3-10 years. The real key is book value, but the stated book has to be doctored to reflect the losses expected to be incurred which have not yet been reserved. That said, I own toe dipping quantities of 4 of these dogs. ReplyFinancials and Housing: The Outlook Remains Ugly [view article]
Anyone see Radian increasing sales force- 30% to date. "We are seeing increased demand at the local level in many of our markets..." And here I thought you rocket scientists had it figured out. We're talking about mortgages right? Supply and demand business cyle righthome prices fall 30%...40%...50%...60%.... What happens to demand? Oh, maybe like at the top... it's different this time.... remember- "there not making any more land!"Hmmm... I guess everyones going to short on the spike up tomorrow... Reply
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
Good article, I am long ABK and MBI based on the same type of thinking, and I am starting to believe that the chance of a zero outcome is zero.I had forgotten ORI, I owned it a few years ago with good results, I will have to check it out again. Reply
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
I agree with the analysis and have personally took some positions in these stocks alongwith PMI. Check out my post on similar topic at:smaniyar.blogspot.com/... Reply
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Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
Finally, finally, finally.I was beginning to worry...Lately we have not be hearing "The Long and Short of it"...
Longs have gotten the 'Short' end of the stick in Market Analysis flooded with constant negative jargon.
Slowly words of upbeat commentary are starting to emerge...
FINALLY!!
Reply
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
You can assume whatever you want but the balance between the pros and cons will speak for itself, thats reflected on their book value. ReplyLathrop
Risk/Reward Analysis Makes Financial Insurers a Buy [view article]
Lets use a hypothetical - if we assume that most, if not all, of these companies income derived from insuring Mortgage Backed Securities, and hypothetically speaking, if the market lost their taste for MBS, or, if Congress woke up and saw that they were too dangerous by generating income at the expense of the underlying homeowners mortgages, would that change your opinion of these stocks?Or how about this - lets say the shareholders of junior tranches brought a shareholder's derivative lawsuit against a trustee of a mortgage backed pool, and the trustee turned to the insurer to pay out on its obligation and the insurer refused. Or lets assume that they did pay out but that started a run on the insurers - would that change your opinion of these companies stock?
It's not enough that you promote the upside of these companies. A balanced article would disclose the downsides as well. Reply