oldlures1

What's Going on at MBIA?

I can't believe I wasted the time to read this. I should have learned the last time.

What's Going on at MBIA?

wobatus - kudos! Much of the real story isn't getting any air time, and, on tht note, will probably never be told. Instead of hearing genuine worthwhile debate over the catalysts for this mess, such as "naked" CDS, naked short shelling, elmination of uptick rule; all tools of manipulative hedge funds, as well as the destructive prior revisions to Fair Value Accounting (i.e. mark-to-market), the blatant bias and subjectivity of the rating agencies.....all of which have played a role.....instead, all folks hear is "subprime"..."insolven... bond insurers"...."let the banks fail!" Yep, Congress, the rating agencies, and manipulative hedge funds needed scapegoats, and apparently they've found them. And the public (and apparently Reggie) are buying the ruse.

MBIA and BofA: Thoughts on Litigation

Thanks for your comments. It's good see a pro-MBIA veiwpoint. I'm long MBIA, and have been a fan of the co since before Ackman's shinanigans.

Citi's Flip-Flop on Mortgage Cramdowns: A Really Bad Idea

Tom, I agree with you. The underlying basis is, as you said, that "A loan, recall, is a contract, willingly entered into between a lender and a borrower." Sure, some folks were taken advantage of, as has been the case for decades (and not just in banking), but they are the exception; few and far between, not the norm.
It is disheartening and disappointing (though not surprising) that many of the comments reflect/support a lack of culpability on the part of the borrower/homeowner. Sadly, it is the prevelance of such mentality, I believe, that exacerbates many of the issues facing us today and undermines progress going forward.
Keep it up - I like the way you think!

AIG's Speculative CDOs in Perspective

Interesting. The article and comments both provide convincing arguments for and against, but I'm a simpleton of sorts, so I default to the basics - you shouldn't be able to buy insurance without an insurable interest, period.

Ugly

I said it once, and I 'll say it again, I believe that the following steps would eliminate half (at least!) of the volitility in the market today:
1) reinstate the uptick rule
(it worked as intended since 1929, but some well-lobbied SEC knuckleheads erased it last year).
2) aggressively enforce the prohibition of "naked" short selling
(you should never be allowed to short stocks that don't exist - can you say "fraud"?)
3) disallow the purchase of CDS/credit default swaps by investors who do NOT have an insurable interest in the company
(I can't purchase hazard insurance on your home; that's illegal, so why should it be okay to buy default insurance in a company of which I have NO insurance interest? It shouldn't!)

If the current market was a bucking bronco, hedge funds would be the rider, and they'd be well past 8-second bell....with no grips....holding a trophy in one hand and a big bag-o-money in the other....just hoping this "ride" will go on forever!

Is Citigroup Failing?

The falling share price is NOT a reflection of failed fundamentals, nor it is a reflection of a "problem". The contrary, it is purely a reflection of bear raiding. Elimination of the uptick rule, coupled with regulated naked shorting and the dubious incentivizing of CDS's (i.e. I can buy insurance in something of which I own NO insurable interest), has produce an environment for unethical practice and bear raiding, not to mention provided the tools by with the former is propogated.

Citi's losses, for the most part, are paper...not cash. The securities on their books are not worthless, but rather not tradable in the current environment (on that note, what is?! Basically, nothing that doesn't start with "T"). So FASB makes them write the assets down on their books.....but the true intrinsic value hasn't dropped that much.

I could be wrong, and only time will tell, but I don't believe for a second that the true book value of Citigroup is reflected in its current stock price. I think it has been tremendously oversold. [Yes, I am long Citi....currently VERY LONG].

You want to solve the ills of the stock market? Here's a few starters:
1) reinstate the uptick rule
(it worked as intended since 1929, but some well-lobbied SEC knuckleheads erased it last year).
2) aggressively enforce the prohibition of "naked" short selling
(you should never be allowed to short stocks that don't exist - can you say "fraud"?)
3) disallow the purchase of CDS/credit default swaps by investors who do NOT have an insurable interest in the company
(I can't purchase hazard insurance on your home; that's illegal, so why should it be okay to buy default insurance in a company of which I have NO insurance interest? It shouldn't!)

Future Gloomy for Ambac, MBIA - Berkshire Likely to Emerge as New Bond Insurance Leader

On a different front, in light of Ambac's recent downgrade to CC and talks of possible regulatory intervention, I wonder what the possibility is that National could reinsure ABK's muni portfolio, like they did with FGIC? That'd be sweet!
I'm long MBI.

Future Gloomy for Ambac, MBIA - Berkshire Likely to Emerge as New Bond Insurance Leader

U338129 - Good point, but for arugment's sake, I'd offer that Moody's downgrade of BRK is irrelevant. As an aside, they only dropped BRK's rating after catching flack about the conflict of interest, so perhaps they're just attempting to save face.
Ultimately, you're probably right, there's no conflict of interest, but sometimes there only need be the perception of such.

Future Gloomy for Ambac, MBIA - Berkshire Likely to Emerge as New Bond Insurance Leader

Anybody know if BRK is still the largest shareholder of Moody's, the company that started the downgrade run on ABK and MBI? It screams conflict-of-interest, but I've heard little chatter on this matter since this time last year.

Berkshire Hathaway Credit Risk, Index Puts Are Overblown Worries

This just makes me all giddy inside. I've got one word for you: "karma"

Bill Ackman's Pershing Square: Portfolio Update

Tom, I agree with you; Ackman is the king of "misinformation". His dubious (and dare I say, unethical) actions have destroyed companies, with negative consequences reaching far beyond their four walls. Frankly, in my humble, naive opinion, he should be counting his lucky stars that he's not a permanent resident of Club Fed. The fact that he's still out there, walking the streets, a continuing threat to our financial system (and the economy indirectly) is...well...unnerving, to say the least.

PS - the fact that Congress actually engaged him for testimony is bewildering -- talk about a fox in the hen house!

EU Moves to Regulate the Rating Agencies; SEC Should Follow Suit

I sure wish this notion could get legs; be more visible. However, at this juncture, I'm afraid the rating agencies are going to get off scott free. They've torched the stage, and extited stage left without anyone realizing it!

Of Guarantees and Printing Presses

Lovely. Haven't seen this type of nonsense on AS for months. I assume you hold as gospel the opinions of Ackman, as well as others of his ilk, so I'll offer you some advise; beware the Pied Piper (and those like him), as he'll fill your head with nonsense and lead you astray.
Stick to the facts and you'll find value, but follow the "spin" and you'll come up empty-handed. (hint: you're currently in the latter category)

MBIA Sues Countrywide: Part of the Solution to Clean Up the Lies

Has anyone seen the latest release regarding mark-to-market accounting? Here's the link: www.sec.gov/news/press...

If this gets legs, I think it could "right" a "wrong" and be a big benefit to the bond insurer's balance sheets and capitalization structures.

Mark-to-market has required them to write down assets to near zero without any regard for future income streams (premiums) generated by existing contracts. Those premium streams have been relatively unaffected by today's market turmoil, so the PV of those income streams should be relatively unaffected as well, yes? Unfortunately, no. They've had to book large write-downs (and obtain LOTS of additional capital as a result) to adhere to existing m-to-m standards...and adhere to the seemingly subjective demands of the rating agencies. Hopefully, this will right a wrong with regard to mark-to-market, and the bond insurers will find themselves not just "over-capitalized" but EXTREMELY over-capitalized. The spotlight will then turn to the rating agencies to see how they react - will they maintain their current positions? Last week, Moody's indicated it would be conducting follow-up reviews of the monolines over the coming weeks and implied that further downgrades were likely. We'll see.