Saturday, February 23, 2008

If this rescue fails then their will be a big bang!

Ambac rescue may be announced Monday or Tuesday

A rescue for bond insurer Ambac may be announced. Ambac, facing billions of dollars of expected losses from guaranteeing repackaged subprime mortgages, is talking to banks and regulators about raising extra capital to keep its top credit ratings, A deal has not yet been signed, and may still fall through. Investors fear that Ambac will lose its top credit ratings forcing investors to sell billions of dollars of securities and lifting borrowing costs for consumers and city governments. The U.S. bond insurance industry, which guarantees some $2.4 trillion of debt, is broadly looking to raise new capital and reorganize as expected losses have mounted. Rescuing or restructuring bond insurers is difficult.

Posted by who stole my pension? @ 05:10 AM (862 views)
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3 thoughts on “If this rescue fails then their will be a big bang!

  • See also techieman’s post on this topic from yesterday via Reuters

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  • This looks interesting. I hope it succeeds.

    Finally they have got some of these top rocket scientists in the City and on the Street together and figured it out.

    How does it work? Can someone draw me a diagram? I must admit i am not up to working out how this is executed.

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  • Cristiano Barbaro says:

    To be honest, I am rather skeptical. If they couldn’t put together the famous Master Liquidity Enhancement Fund, a mere couple of months back, with “only” 150 billion, and put all the garbage in there… I just don’t see how they can put together a rescue package for this much bigger problem. I am expecting lots of failed rescue packages to come in the future, all designed to lull the public and investors that the powers that be are bolting the stable doors. Should have done it before the whole gambling mess started in the first place, i.e.: well before subprime, even beore the dot. com bubble of 2001. What we are all witnessing today is the collapse of the paper based economies of the West, the collapse of the idea that you could have entire nations thrive on actually producing hot air.

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