Wednesday, January 9, 2008

Turns out that Warren Buffet is so savvy…..

MBIA, Ambac Tanks Due to Countrywide Bankruptcy Rumors

Ooof, things have gone from bad to ugly. Bloomberg reports that the stocks of mortgage insurers MBIA and Ambac plummeted due to an earnings estimate cut by Morgan Stanley and talk of a Countrywide bankruptcy. It goes without saying that these developments imperil the fundraisings the insurers have been told by the ratings agencies they need to execute to fend off a downgrade. And as has been discussed widely, the implications of a ratings cut are serious, since it would lead to a wave of forced selling of certain types of insured debt. Sovereign wealth fund to the rescue? But if they were really savvy, they'd let the train wreck happen and pick among the pieces afterward. This is like your home insurer AND its insurer both going under

Posted by lvmreader @ 03:58 AM (380 views)
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