CT Programmer

MBIA's Momentous 2Q: Need More Evidence That the Turn Has Arrived?

I think the stock buyback is the best thing right now, since the stock is ridiculously low and they are so overcapitalized. They should have started the buyback at $4, but my guess is the regulators may not have taken a liking to that. There's no way that they will get AAA back currently, even with a clean subsidiary, because of the cloud hanging over them. You've just got to give that one time to fade away, then the rating agencies will eventually see that they're solid. The no new business issue I think is a big one. That is a huge question mark with MBIA or Ambac and their long-term viability. But I've stopped listening to anyone's estimate of book value. When I bought soon after the plunge back when they were around $15, everyone was saying their book was $13, so I figured that even if they went into run-off I'd recoup most of it and there was the upside that everything would sort itself out and they'd recover (which I still ascribe to). But the estimates of book value have been all over the place, and I got nervous as that book value went down to 8, then 3, etc., etc.. But I doubled-down at less than $4 and I stick to my original thesis that this company will bounce back. I don't know if they'll ever be writing new business again, and if they do it will be at half the previous volume. And I guarantee there are state lawsuits on the way. But they're definitely worth more than what I paid for them, so I'll be happy in the long run. Anyone that bought at $60 I don't think will ever see that level again.