Robert Arvanitis's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/211088/comments http://seekingalpha.com/article/87235-evaluating-ambac-intrinsic-value-withstanding-market-volatility?source=feed#comment-215694 215694
On the muni side, if the business model ever worked, it is now over. The rating agencies can no longer lie - a so-called triple-B muni is in fact a triple-A on the corporate scale. Once rating agencies are forced to end the false distinction between "corporate" and "muni" scales, that eliminates the artificial need for insurance.

On the corporate side, the business model never worked. A small part of the corporate credit spread is for liquidity and traders' capital. Not nearly enough to justify insurance premiums at less than 40% of market spread.

Finally, the author seems to dismiss mark to market. But investors have a right to know. If you can't sell it, it ain't worth much.]]> Sun, 27 Jul 2008 12:22:13 -0400
On the muni side, if the business model ever worked, it is now over. The rating agencies can no longer lie - a so-called triple-B muni is in fact a triple-A on the corporate scale. Once rating agencies are forced to end the false distinction between "corporate" and "muni" scales, that eliminates the artificial need for insurance.

On the corporate side, the business model never worked. A small part of the corporate credit spread is for liquidity and traders' capital. Not nearly enough to justify insurance premiums at less than 40% of market spread.

Finally, the author seems to dismiss mark to market. But investors have a right to know. If you can't sell it, it ain't worth much.]]> http://seekingalpha.com/article/81466-whither-municipal-bond-insurance?source=feed#comment-186344 186344
When bond "insurance" was more of a service to muni issuers, like title insurance for example, it may have been worth a few bps.

When bond insurers began to take all the credit risk for half the credit spread in corporates, that was the end.]]> Mon, 16 Jun 2008 09:50:32 -0400
When bond "insurance" was more of a service to muni issuers, like title insurance for example, it may have been worth a few bps.

When bond insurers began to take all the credit risk for half the credit spread in corporates, that was the end.]]>