tag:blogger.com,1999:blog-6798074091942701235.post1437139292395764645..comments2024-03-27T11:08:31.557-04:00Comments on Can Turtles Fly?: Some (Minor) Positives on the Horizon for Some Bond InsurersSivaram Vhttp://www.blogger.com/profile/06361276466660862882noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6798074091942701235.post-28888072326399837132008-08-14T21:42:00.000-04:002008-08-14T21:42:00.000-04:00The fact that Ambac still booked $1 billion as a l...The fact that Ambac still booked $1 billion as a loss keeps me concerned. <BR/><BR/>The Alt-A situation is not encouraging. Monolines still have exposure to alt-A and prime in their so-called "high grade CDO". But losses on those, even if elevated, will be nothing like subprime. In any case, the most toxic--the CDO-squareds--have been conservatively reserved by Ambac so now it's all down to the economy and a few losses here and there...<BR/><BR/>I have to disagree with you about suing William Ackman. I was thinking about making a post about it and will try to flesh out my views. My views are based on the notion of freedom of speech and I have seen nothing from William Ackman to indicate anything illegal or immoral. And remember that I'm on the opposite side of his trade and losing big time, so this isn't some pro-Ackman view. Let's go into that later...Sivaram Vhttps://www.blogger.com/profile/06361276466660862882noreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-9713571117288035142008-08-14T16:37:00.000-04:002008-08-14T16:37:00.000-04:00And in an afterthought, the more I think about thi...And in an afterthought, the more I think about this MBIA vs. Ackman lawsuit round 2 the more I like the idea. Will be great to see how Ackman "explains" his constant claims of MBIA insolvency and imminent bankruptcy while his own analysis says company is fine (but suffering a big loss). Great spectator sport too! Will Jay Brown finally bite the dust? Will William Ackman blow up his second fund? Will Eric Dinallo call the sqaubling children to order? Stay tuned!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-86705614834659954702008-08-14T16:27:00.000-04:002008-08-14T16:27:00.000-04:00Well, things definitely look like they are moving ...Well, things definitely look like they are moving the monolines' way. Even the bears are beginning to see that 2006 vintage subprime losses are burning out with the class of '07 close behind (Synchro's guru John Hempton apparently even bought Ambac on that basis). <BR/><BR/>MBIA actually posted good numbers (and there as well as in Ambac's numbers you can already see the effect of the contract terminations on, among other things, ARS that you mention. Insured amounts are coming down quite fast and earned premiums are up substantially, thus the excellent operating profit for MBIA. <BR/><BR/>Terminations of insurance is likely to happen in many cases even without the vulture investors (Merrill reserved $1.5 billion to cover for book losses on upcoming insurance terminations, expect deals to be announced in the near future, probably with MBIA, Merrills main insurer). The vultures might make the process faster though. If Ambac can actually get Connie going with a AAA by october (seems wildly optimistic to me, but the CEO seemed rather confident of that timeline) this could be a surpisingly fast turnaround (knock wood!).<BR/><BR/>Meanwhile the spotlight shifts to prime and alt-A loans going sour at an increasing rate. No fun for the banks but monoline exposure in that area seems modest.<BR/><BR/>Oh Synchro, BTW how is your gold doing?Anonymousnoreply@blogger.com