Tuesday, February 12, 2008

Munis “Rescued” No CDOs though

Treasurys sell off on Buffett muni offer

Buffet offers to Reinsure $800 bn of munis, they think its all over?!?!? Big up the FTSE.

Posted by techieman @ 04:46 PM (867 views)
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8 thoughts on “Munis “Rescued” No CDOs though

  • This is interesting because it indicates the the bond insurers did a good job on the muni bonds. It is their disastrous miss-calculation of risk for mortgage CDOs that is the problem.

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  • From the FT

    US stocks rallied strongly on Tuesday after Warren Buffett, the billionaire investor, offered to take over $800bn in municipal bonds currently covered by troubled bond insurers. News of the plan spurred a rally in financial stocks on hopes the intervention would help calm fractious credit markets. Oversold telecoms and energy stocks also rose steeply as harried traders rushed to buy into market weakness.

    At midday the S&P 500 was up 1.5 per cent at 1,359.27, the Nasdaq Composite gained 1.1 per cent to 2,344.84 and the Dow Jones Industrial Average rose 1.7 per cent to 12,447.95.

    FTSE 100 @ Close up 182

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  • Buffet is far from a charity. He is like the travel insurance company that sells you insurance in case you are kidnapped by the Baader-Meinhof gnag. In Bridlington. In 2008.

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  • Shows how irrational and sentimental the stock market is at the moment. The Buffett offer is a non starter and doesn’t address the real problem the Monolines are in. Why would they sell their best chunks and keep the worst. I would expect the FTSE will fall on Wednesday as everybody digests the reality. No quick fixes i’m afraid. Too big.

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  • Believing Buffett is like a chinaman believing in Tianammen Square. Utter Crap!!!.. This is the final throw.. guys.. good luck.. and god blessing. This guy has had a life. Most of us havn’t. Accept for the betting office clerks in “The City”.

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  • submedia – you may well be right. Was tech support (50% of upmove from lows) at 5680 ish. bought some around there – got out of half yesterday before the close. Expecting pullback as you say but then perhaps more gains (so holding the other half) – now how much more?? If i could tell you that for sure i’d be siting next to a pool in Sardinia,,,,,,,

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  • …of course looks like a short squeeze as much as anything else. Ftse down today in pre-market action.

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