U.S. Market: So Much Stupidity in Such Little Time [View article]
I aggree, the major nations deficits come from budget, savings, trade and leadership. In budget alone we have the big poops MEDICARE, MEDICAID, SOCIAL SECURITY, those are the major liabilities created by guess who...yeah you guessed it, by the socialist communist democrats, on top to spicy up a little bit they created the GSE's to preach the affordable housing motto, that was the final shot to our economy that trigger the financial mess that we are dipped in. Republicans are guilty for not stopping it or modifying it and all of us for not waking up to a reality check.
Looks like Wachovia got rid off the prior toxic risky wasted bank subsidiaries and kept the good ones. Now it can start from scratch to build a new banking subsidiary with safe practice together with its remaining good outstanding subsidiaries. The current subsidiaries of Wachovia make it look like "Merrill Lynch without the toxic risky waste", good job from management it separated the good bank from the bad bank overnight, plus its CEO Bob Steel is one of the top rated mutual fund managers. Wachovia will keep the valuable human resources and the talent that have expirience in the banking business saving them for the new banking subsidiary. Buying the municipal bonds or the auction rate securities will give the inflow of cash as long as its hold even to maturity, so the prospects are good.
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In respect to Ambac and MBIA, they need to keep and save their cash they already have and any cash coming into their coffers, deleverage from annoying debts, obligations and risks, stop paying dividends to increase their book value and once their book value is adequate and sound reinstate their triple A ratings again to start writing down new public bonds insurance only in low risk areas of the market. This strategy in itself is the best advertisement to recruit new business because the new clients will precieve that " if these folks were able to survive the credit crisis then they can survive anything".
AMBAC and MBIA are already doing this strategy, so now its a matter of time for their book value to appreciate quarter by quarter to reinstate their triple A again, you dont have to be a rocket science to figure this out.
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AMBAC and MBIA are already doing this strategy, so now its a matter of time for their book value to appreciate quarter by quarter to reinstate their triple A again, you dont have to be a rocket science to figure this out.