User 165905's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/165905/comments http://seekingalpha.com/article/80431-mbia-and-ambac-edge-of-the-cliff-ratings-wise?source=feed#comment-184572 184572 Thu, 12 Jun 2008 20:02:02 -0400 http://seekingalpha.com/article/80865-the-case-for-berkshire-c-o-geico?source=feed#comment-183094 183094
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]]> http://seekingalpha.com/article/80431-mbia-and-ambac-edge-of-the-cliff-ratings-wise?source=feed#comment-183082 183082 Wed, 11 Jun 2008 05:39:30 -0400 http://seekingalpha.com/article/80431-mbia-and-ambac-edge-of-the-cliff-ratings-wise?source=feed#comment-182013 182013 There is a better chance of seeing zero than seeing 4 or 5]]> Mon, 09 Jun 2008 15:21:22 -0400 There is a better chance of seeing zero than seeing 4 or 5]]> http://seekingalpha.com/article/77193-a-simpler-explanation-for-bill-miller-s-losing-streak?source=feed#comment-168750 168750 Fri, 16 May 2008 10:13:01 -0400 http://seekingalpha.com/article/76483-stop-listening-to-bankers-talking-heads?source=feed#comment-166122 166122 Mon, 12 May 2008 08:34:28 -0400 http://seekingalpha.com/article/76024-buffett-s-soggy-logic-on-guarantors-ratings?source=feed#comment-163207 163207 Poin1) The rating should be based on the guarantor's ability to pay claims, not necessarily the rating agencies "judgment"; the judgment has been wrong, and the ratings trends provide some reason to believe that is definitively the case here. His comments recently have focused on the rate of interest an guarantor has to pay to raise money, suggesting that 14% may hint at substantially reduced "intrinsic" value. By definition, the substantially higher cost of debt and equity capital reduces future ROE materially, especially with so little new business being written. The margin of safety, which many believed existed (i.e underwriting to zero loss ratios) proved fallacious, hence the need to revisit initial assumptions even in the event he believed they were AAA's before (which he didn't)
2) Valuations can get out of whack. But its not just that. Confidence in a company's solvency (margin of safety) are integral to its buinsse model, and its claims paying ability is certainly now hampered by the substantial reserve additions, increased cost of capital, and reduced profitability.
3) Guarantors are a small fraction of the rating agencies revenues. The intrinsic value of MCO has probably diminished, but perhaps not sufficient to merit his disinvestment.
4) Its not really trash talking, its taking advantage of a market opportunity.
For the record, many insurance companies (including AIG under Greenberg) refused to write the insurance business for securitized products, precisely because of the lack of relevant historical loss data, inaction that now seems quite prescient.
]]> Wed, 07 May 2008 07:41:36 -0400 Poin1) The rating should be based on the guarantor's ability to pay claims, not necessarily the rating agencies "judgment"; the judgment has been wrong, and the ratings trends provide some reason to believe that is definitively the case here. His comments recently have focused on the rate of interest an guarantor has to pay to raise money, suggesting that 14% may hint at substantially reduced "intrinsic" value. By definition, the substantially higher cost of debt and equity capital reduces future ROE materially, especially with so little new business being written. The margin of safety, which many believed existed (i.e underwriting to zero loss ratios) proved fallacious, hence the need to revisit initial assumptions even in the event he believed they were AAA's before (which he didn't)
2) Valuations can get out of whack. But its not just that. Confidence in a company's solvency (margin of safety) are integral to its buinsse model, and its claims paying ability is certainly now hampered by the substantial reserve additions, increased cost of capital, and reduced profitability.
3) Guarantors are a small fraction of the rating agencies revenues. The intrinsic value of MCO has probably diminished, but perhaps not sufficient to merit his disinvestment.
4) Its not really trash talking, its taking advantage of a market opportunity.
For the record, many insurance companies (including AIG under Greenberg) refused to write the insurance business for securitized products, precisely because of the lack of relevant historical loss data, inaction that now seems quite prescient.
]]> http://seekingalpha.com/article/74582-still-too-early-for-banks?source=feed#comment-160549 160549 Fri, 02 May 2008 07:54:24 -0400 http://seekingalpha.com/article/74943-12-observations-on-residential-housing?source=feed#comment-159806 159806 Wed, 30 Apr 2008 20:33:49 -0400 http://seekingalpha.com/article/67104-thornburg-s-a-huge-bargain-after-monday-s-crash?source=feed#comment-159795 159795 Wed, 30 Apr 2008 20:01:21 -0400 http://seekingalpha.com/article/74552-the-bloody-knife-used-to-gut-bear-stearns?source=feed#comment-159171 159171 To suggest that this scenario was orchestrated by a few to make money on shorts/puts on a few million shares is ludicrous, you can do better than that when evaluating conspiracy theories. Most of your "theory" focuses on this purported "options play" answer the issue about volume (on the 11th and 12th and). There are much better rumors surrounding why institutions wanted them to go down. You have done better work before]]> Wed, 30 Apr 2008 07:46:02 -0400 To suggest that this scenario was orchestrated by a few to make money on shorts/puts on a few million shares is ludicrous, you can do better than that when evaluating conspiracy theories. Most of your "theory" focuses on this purported "options play" answer the issue about volume (on the 11th and 12th and). There are much better rumors surrounding why institutions wanted them to go down. You have done better work before]]> http://seekingalpha.com/article/67104-thornburg-s-a-huge-bargain-after-monday-s-crash?source=feed#comment-129334 129334 Thu, 20 Mar 2008 11:35:48 -0400 http://seekingalpha.com/article/67104-thornburg-s-a-huge-bargain-after-monday-s-crash?source=feed#comment-129172 129172 Thu, 20 Mar 2008 06:07:13 -0400