fxtrader07

Ambac Collapse: Anticlimax of the Week

as I see it, Moody#s willö be gone before all this is over. The helped to create this mess with their nonsensical AAA-ratings of RMBS and CDOs. They deepened the crisis with their flip-flopping and their strange downgrades (MBI/ABK; LEH!) at very strange junctures. Hank Paulson will not be amused about how Moody#s and S&P further complicated things and added to trouble by downgrading LEH and AIg while everybody trioed to put bailout plans togehther. I mean, for all the months they had already waited - they could have easily waited for another couple of days, not?

Ambac Collapse: Anticlimax of the Week

Moody#s shut be shut down, as well as S&P. period. they did more harm than good and they continue to do so. their actions remind me by now of moronic daytraders flipping back anf forth - buying high, selling low, turning from bullish to bearish on a whim. same with Moody's upügrades - downgrades, most of them juyt in response to public pressure. Go figure. the sooner these ratings agencies cease to exist the betetr for everybody.

Financials and Housing: The Outlook Remains Ugly

your abk, mbi and rdn shorts are mispülaced and will blow up in your face. you may well be correct on the housing market but that doesn't mean your bond insurance shorts will pay off. I am siding with marty whitman in this case who has a decades long proven track record and knows A LOT about insurers, distressed investing and financial stocks.
and no, i am not surprised that you are now short fannie and freddie. after all bill ackman also went short them - and he seemingly can't make ANY move without Tilson following suit, no?

The Emperor (Mr. Ackman) Has No Clothes

Well, are you really so naive to think that Ackman ever believed the stuff he was telling the public day after day? All he needed to get done was to create enough fear and panick. Not to be right with his claims. I would certainly not be surprised to learn that he actually was now long the monoliners.
That being said, the picture is not as rosy for ABK and MBi as you might think. They will be able to deal with their mistakes in the CDO business, sure. But their main business was insuring muni-bonds and if you look at the precarious state of the us economy and the quick deterioration of federal and municipal budgets (collapsing tax revenues!) this spells lots of trouble. I am cautiously long mbi/ABk, mostly senior debt, but expect substantial deductions from current book value estimates over the next 4-5 years.

Ambac’s CDO Woes

'The question is, however, is Ambac now a “buy”? Or is it on the verge of collapse?'
what? if what we saw over the past 15 months wasn't THE collapse then i don't know what else must happen before you call it a collapse.

regarding risk: the risk of the stocks short term movements can't be quantified in advance, true. However, the risk of the stock becoming intrinsically worthless can, even if a just on a probability basis. Taking Ackman's presentations and assuming a very bad scenario instead of total and complete armageddon the company will survive in a run-off scenario which may unlock residual value in the 12-18$/share range over the next 5-8 years. assigning a -very high- probability of 20% for ackman's bk call we arrive at a probability-weighted value of ca. 10-15$/share.
that would make for a 400-650% appreciation from todays close (2.12$) over the next 5-8 years, or 25-37% Compound annual rate of return. not bad, but of course it's a highly speculative stock nonetheless.
btw, looking at risk-reward, whoever is still short the stock and hasn't covered over the past week must be defined as dumb money

Outlook Remains Grim for MBIA, Ambac

'no revenues or earnings' ?? do you even have the slightest understanding of these companioes? i doubt it.
in short, you recommend shorting stocks that
have already fallen by 90-95%,
have a large percentage of their float shorted,
have a good chance to realize a book value of 5-10 times their current market cap over the coming years if they can avoid bk and further dilution

and on top of it, you base it on their terrible last quarter and the expected bad current one. So you think, yesterdays news will determine the stock's moves of tomorrow?

Help for the Guarantors - From an Unexpected Source

@Tom brown: thanks for another very insightful piece on the financial sector

Help for the Guarantors - From an Unexpected Source

@crashof2008: you are a poor heavily biased guy who obviously goes to sleep every night hoping the world will have come to an end by the time he wakes up next morning. And over the course of the day you are seemingly absessed to get all the bad news there is.
Enjoy the money you make that way while it lasts (if you make any money, that is) but it's a pretty miserable way of living. The money you make (if at all, longer term) is a lousy compensation for a life full of negativity and friction.

Ambac, MBIA: The Rating Shoes Drop

@crash: ignore the many substantial counterpoints to your doomsday scenario at your own peril. From a Bk/solvency point of view i would say there are 90% of the NYSE stocks more endangered than MBI and ABK.
The sky will not be falling anyway and the American economy as well as the stock markjet will muddle through a few difficult years. but other sectors of the economy and the stock market are certainly to face more headwinds than ABK/MBI going forward. they had their pain and are more or less done with at this point.

On the Monolines: Brown vs. Tilson, Round 2

@crashof2008: you wish for a crash, you wish for mbi/ABK to go bk. Well, your choice. I doubt though, that you ave even the slightest grasp of the wider implications and of the situation required to make that happen. As Tom brown put it very well: 'you don't want to own anything that looks like a stock then'
It is one thing to be prudent and to prtect one's wealth against a crash. It#s entirely another to position in such a way as to heavily profit from a crash. it changes perspectives on a wide array of issues. For instance, you will now be searching the news for every bad headline theire is. You must hope now that the sky starts falling. That mopre people lose their jobs, that real estate crashes further, that oil rises even faster, that municipalities go bk etc. What a miserable approach to life! To eagerly wait for bad news and to get pretty much uneasy when good news trigger in instead.
Think about it - is it worth that?

The End of the Monoline Bond Insurance Business

Bold prediction - little substance and reasoning. Given the deteriorating finances of the municipalities you will be surprised how they will have to scramble for bond insurance over the coming years or else face paying prohibitively high interest rates. There was a reason that a sharp-eyed and smart investor like Buffet committed significant resources to start his own bond insurer.
I have no clue whether MBiA will again write bond insurance (if, then in any case via a new subsidary) but to claim the "end of monoliners" might be a pretty premature call.

Disagreeing With Tilson on the Monoline Insurers

@MWeinstein: thanks for that clarification and the republishing.

Whitney Tilson’s Response on the Monolines

i doubt that ackman is out. there is no confirmation for that anywhere. and given his latest, even heavier attack on mbi and Abk he still seems to bet heavily on their total collapse:
www.bloomberg.com/apps...

and there he is again allover the media: bill ackman with yet another, even gloomier prediction, i.e. wish, for abk and mbi.
what makes me sick is that these guys get away with their absolutely selfish efforts to put the entire financial system at risk only to make money for themselves. I am certainly aware of the fatal mistakes made by mbi and abk when they took risks they should never have taken. But ackman and his buddies are now trying to trigger key-events that would unleash a financial storm of epic proportions. This is not about hammering the stock price anymore. this is about trying to affect the real underlying business by putting up ever more public pressure. It#s like pulling all strings available to ignite a run on a major bank - no matter how and no matter the consequences for society.
crooks are running many companies and ruin them. and crooks are running many hedgefunds and ruin companies with massive naked short selling, unscrupoulos continuous attacks and bashing.
the financial 'markets' finally start eating main street after 'just milking' them for decades

More Alarmism Over MBIA

and there he is again allover the media: bill ackman with yet another, even gloomier prediction, i.e. wish, for abk and mbi. what annoyes me is that these guys get away with their selfish efforts to put the entire financial system at risk only to make money for themselves. I am certainly aware of the fatal mistakes made by mbi and abk when they took risks they should never have taken. But ackman and his buddies are now trying to trigger key-events that would unleash a financial storm of epic proportions. This is not about hammering the stock price anymore. this is about trying to affect the real underlying business by putting up ever more public pressure. It#s like pulling all strings available to ignite a run on a major bank - no matter how and no matter the consequences for society.
crooks are running many companies and ruin them. and crooks are running many hedgefunds and ruin companies with massive naked short selling, unscrupoulos continuous attacks and bashing.
the financial 'markets' finally start eating main street after 'just milking' them for decades

Two More Homebuilders Go Bust

@vitello: and there he is again allover the media: bill ackman with yet another, even gloomier prediction, i.e. wish, for abk and mbi. what annoyes me is that these guys get away with their selfish efforts to put the entire financial system at risk only to make money for themselves. I am certainly aware of the fatal mistakes made by mbi and abk when they took risks they should never have taken. But ackman and his buddies are now trying to trigger key-events that would unleash a financial storm of epic proportions. This is not about hammering the stock price anymore. this is about trying to affect the real underlying business by putting up ever more public pressure. It#s like pulling all strings available to ignite a run on a major bank - no matter how and no matter the consequences for society.
crooks are running many companies and ruin them. and crooks are running many hedgefunds and ruin companies with massive naked short selling, unscrupoulos continuous attacks and bashing.
the financial 'markets' finally start eating main street after 'just milking' them for decades