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crashof2008
31 Comments
Whitman's Q2 Letter and Disclosure Requirements
Duh.
Maybe if you had beyond college algebra you would understand that MBI is truly, irrevocably bankrupt.
See you in January, when FASB 163 takes full force.
The End of the Monoline Bond Insurance Business
What does that hedge word "average" mean here? There are many ways to compute an "average".
For example, 10 bonds worth only 10,000 dollars each that are rated just one notch above AA "averaged" with 10 bonds worth 100 MILLION dollars rated just one notch BELOW AA would constitute such an "average" under this statement, even though the practical result would be that the vast majority of the alleged "collateral" is rated below AA.
Given MBI's record of dissembling, it seems highly likely that a large part of that 10.2 billion figure they cite is BELOW AA and will therefore be insufficient as collateral.
The key weasel fudge word MBI uses here is "average". Precisely HOW are they doing this "averaging"?
On the Monolines: Brown vs. Tilson, Round 2
It's payback time now. If he thinks that he can spin off a AAA unit and provide huge bonuses in the process for him and his henchmen, he is seriously, seriously mistaken.
On the Monolines: Brown vs. Tilson, Round 2
The safe harbour language which he cites are about public statements offered in the connection with trading of registered securities. Nothing more, nothing less.
But to use this safe harbour language to defend MBI's completely unacceptable betrayal of its pledges to the ratings agencies is pathetic.
Earlier this year, MBI was intent on keeping its AAA rating. During the negotiations with the ratings agencies, Spitzer and Dinallo, MBI pledged that they would deploy the proceeds of various securities to be offered as a buffer to risky assets in various subsidiaries.
In exchange for this pledge, promise and commitment, all the other parties in the negotiation agreed to keep MBI's AAA rating intact on a provisional basis, pending periodic review required by the continuing collapse in key sectors of the derivatives market, including the term option bond sector used in short term muni financing, of which MBI is a market maker.
Simply stated, MBI broke that pledge they made during the negotiations. Now the ratings agencies are furious. They have been betrayed.
And to claim that somehow safe harbour language routinely issued in the issuance of securities issuance excuses their betrayal of the firm commitments they made to a number of key regulatory and quasi-public actors during critical negotiations is simply absurd.
Who are you trying to kid?
And the gibberish in this article goes on. I'll elaborate more fully shortly.
Matt
More Alarmism Over MBIA
1. the monoline industry as a whole is dying as previously lucrative customers such as New York, New York City, California and Florida now do not purchase monoline insurance at horribly inflated prices but instead now issue their bonds more cheaply on the full faith and credit of the issuer, just as the Federal Government does and
2. that if MBI uses the 900 million it pledged as collateral to spin off a new entity Moody's and others are likely to downgrade MBIA two full notches or more, which would in fact be the end of MBI.
Research Zeitgeist: Bank Capitalization Concerns Heat Up
A loan is not a gift.
It must be repaid.
MBIA and Ambac: Edge of the Cliff, Ratings-Wise
California, New York, New Jersey, New York City and now Florida have all decided not to use monoline insurance anymore. That trend is growing rapidly. Those are huge clients.
Soon all 50 states will simply issue bonds on their own full faith and credit just like the US government does.
It's far cheaper that way.
Monolines will default long before states do.
Why does MBI refuse to give an open accounting of what's actually going on in their offshore subsidiaries? What are they trying to hide?
Muni Defaults Triple
Monolines' All-Important Debt Rating Threatened
All the wild rosy scenario projections for ABK and MBIA that they are touting are heavily based on revenue streams from new writings, but in actuality they have fallen off a cliff.
Stay tuned.
Not to mention the Tender Option market!
Crash of 2008
MBIA: Credit Where Credit Is Due
MBIA: Credit Where Credit Is Due
Will Lehman Follow Bear into the Woods?
I am filming a documentary entitled "The Crash of 2008". Portions of
what will be used in parts of the film are now available at:
www.youtube.com/user/C...
I was a market maker in derivative securities and have read hundreds of
research papers published by individual Federal Reserve branches. I
found the most informative ones to be from Kansas City and Atlanta.
Additionally, I have reviewed scores of research papers by various
Federal Reserve branches prior to publication.
Matt Dubuque
The Crash of 2008
Fed's Strategy to Halt Debt Meltdown is Not Working
what will be used in parts of the film are now available at:
www.youtube.com/user/C...
I was a market maker in derivative securities and have read hundreds of
research papers published by individual Federal Reserve branches. I
found the most informative ones to be from Kansas City and Atlanta.
Additionally, I have reviewed scores of research papers by various
Federal Reserve branches prior to publication.
Matt Dubuque
The Crash of 2008
Spitzer: The Monoline Angle
How is that good for business?
If MBIA is such a AAA stock, why are they forced to pay 15% on their newly issued debt? Isn't that the rate firms with terrible prospects are required to pay?
Or do you know far more than those who would lend money to MBIA in the capital markets?
Have you taken the time to read the 10K and the 10Q that MBIA recently filed with the SEC? You would serve yourself well to read both and attempt to understand them.
These are what MBIA is saying about their prospects, not me!
Why don't you read (and try to understand) what they are saying to the Feds (in the forms of their recent 10K and 10Q) under penalty of perjury?
My, my.
Oh well. Best of luck to you. Be sure to check back in a year!
Matt
The Municipal Bond Dilemma
Are you saying that because we live in a socialist society we are not allowed to short the stock?
My, my.
If MBIA is such a wonderful AAA company, why do they have to pay 15% to borrow money in the capital markets? That's junk bond rate and is what they borrowed money when they raised emergency capital in the debt markets earlier this year.
Should that fact also be kept secret?
Matt