john haskell

What's Going on with Bond Insurers?

Steve- since you are a total newbie to this area, a bit of advice. Don't worry about the monoline ratings.

The path has already been cleared by ACA- that is, the path from AAA to bankruptcy. The rating agencies have been practicing up for this, taking AAA rated CDO's down to CCC in a single step. They won't downgrade the monolines, the monolines will just show up in BK court, blaming Ackman the whole way.

Marty Whitman is a smart investor and he will lose his entire investment. He will still be smart, but this one particular idea wasn't. It's OK- Buffett bought shares in USAir after all.

Letter Writer of the Day: MBIA's Jay Brown

Actually, the "enormous personal profits" accumulated "while destroying the industry" were accumulated by Brown and his opposite numbers at ACA, Channel Re, FGIC and MBIA.

MBIA Dismisses Ackman: Got A Better Plan?

When MBIA and Ambac are resting securely on the bottom of the ocean, posters 1-3 above will look foolish.

In the meanwhile, it would be nice (as Ackman proposed) for what little cash flow dribbles out of these companies to be paid first to muni policy holders, and subsequently to structured finance gamblers.

There is a much stronger public policy argument for supporting the muni market (which will live on) instead of supporting the structured finance market, which has about the same life expectancy as a GI who just sat down on a live grenade.

Thoughts on Ambac Bailout, MBIA, Berkshire's Muni Bond Backing

every time someone tries to point out that the monolines are teetering, he has to put up with all this "talking your book" BS.

It's as if Churchill, after warning the British people about Hitler for 8 years, and after watching the Germans sweep across France, had to listen to the Chamberlain supporters moan, "yeah, but you are just talking your book."

Let someone explain to me how a reinsurer can simultaneously be rated Aa3 and have its equity be worthless. Until those are reconciled, I recommend that the "talking your book" fools keep silent.

Ackman's Plan for Bond Insurers Is the Best So Far

management simultaneously claims their structured finance losses will be small, while maintaining that Ackman's proposal is self interested and unacceptable. That's all you need to know- especially if you are an Ambac or MBIA shareholder.

Ackman's Plan for Bond Insurers - Talking His Own Book

hmmm, well then let the insurers sell their muni books to Buffett for 150% of the total future premium income...wait, that proposal was made by someone who had an interest in the outcome, so should be ignored.

Here's another proposal- lend/invest billions to the insurers because this current market trouble is just temporary and will blow over soon (in the estimate of the CEO-of-the-day at Ambac). Oh wait- that proposal is also tainted by self interest.

OK then here's a third- Eric Dinallo suggests the monolines just fraudulently transfer assets out of the insurance subs to make sure there are funds to cover the muni bonds. I wonder if he might be interested in the outcome here?

All I'm asking for, is for someone to spend a huge amount of effort on structuring a solution to this problem despite his having absolutely no interest in what that outcome might be.

MBIA: Triumph of the Technocrats?

The CEO also said that they had plenty of capital to maintain their AAA rating. Which is just a flat out lie, as the agencies (reminder: the CEO doesn't set MBIA's rating himself, the agencies do) have unanimously said that MBIA needs to raise more capital to maintain their ratings. Proven liar for CEO- sounds bullish to me!