tag:blogger.com,1999:blog-6798074091942701235.post3775811125235765994..comments2024-03-29T01:35:09.550-04:00Comments on Can Turtles Fly?: Ambac Posts Second Quarter 2008 EarningsSivaram Vhttp://www.blogger.com/profile/06361276466660862882noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6798074091942701235.post-16061025422626528082008-08-07T19:40:00.000-04:002008-08-07T19:40:00.000-04:00Synchro,I saw that. I was thinking of whether to p...Synchro,<BR/><BR/>I saw that. I was thinking of whether to post that but decided against it. Maybe I'm too biased towards Bill Miller but that almost sounds like pulling out assets near the bottom. Here you have a pension fund that decided to pull the assets now, when they should have done that 4 or 5 years ago. Furthermore, they seem to swap the assets into passive index funds and fund-of-hedge-funds. Probably the worst move you can make now but what do I know?<BR/><BR/>If people thought that private equity was in a bubble, wait until the hedge funds start shutting down. This seems especially likely now that the commodity boom seems to have ended--at least for the time being. Hedge funds are supposed to have low correlation with the broad market but that hasn't been the case in the last few years. It depends on the specific fund but let's just wait and see how many of these funds actually do well in this bear market...Sivaram Vhttps://www.blogger.com/profile/06361276466660862882noreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-32640292652762280232008-08-07T19:35:00.000-04:002008-08-07T19:35:00.000-04:00ContrarianDutch: "MBIA presents q2 tomorrow, will ...ContrarianDutch: "MBIA presents q2 tomorrow, will be interesting to compare and contrast..."<BR/><BR/><BR/>MBIA has exposure to commercial real estate, which hasn't done that well lately (although nowhere near as bad as residential.) It'll be interesting to see what happens to MBIA.<BR/><BR/>MBIA also didn't commute any of their contracts (yet) so it'll be interesting to see if they cut any deals (but didn't announce them)...Sivaram Vhttps://www.blogger.com/profile/06361276466660862882noreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-47450006742670041802008-08-07T17:00:00.001-04:002008-08-07T17:00:00.001-04:00Some news about Your Main Man's assets being pulle...Some news about Your Main Man's assets being pulled:<BR/><BR/>http://www.clusterstock.com/2008/8/ legendary-fund-manager-bill-miller-fired-by-client<BR/><BR/>Somewhat ironic that the man who built his lucky streak on averaging down (masqueraded as "value investing") is now having his assets yanked out of his hands.<BR/><BR/>But...in the spirit of being Fair and Balanced, his performance lately has been better due to some short squeezes taking place in his favorite haunts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-31765278764368383592008-08-07T17:00:00.000-04:002008-08-07T17:00:00.000-04:00It seems to me the GAAP profit is almost entirely ...It seems to me the GAAP profit is almost entirely driven by "writing down" the value of Ambac's own liabilities. At the end of june Ambac CDS spreads were at levels implying imminent default, so on that basis the "market value" of Ambac's liabilities declined substantially. That would explain why they expect this to reverse in july as CDS spreads have been coming down. Pretty meaningless indeed from a business point of view (but it might help convince people that the marks to market are meaningless in the first place and that would be a plus.)<BR/><BR/>There is good news here in the form of the reductions in the reserves against CES/HELOC and the "burnout" of new delinquincies on these loans. They are also distinctly optimistic about Connie's chances of making it of the launch pad, that too sounds good.<BR/><BR/>The one thing I had really hoped not to see (but got a big dose of) is an increase of loss reserves. As you say, that is bad news, especially given the size of the additional reserve. They doubled their CDO loss expectations in a single quarter so that had better not continue. Still, the reserves appear to be mostly driven by collateral downgrades which might be overdone in the current environment. So as with the CES/HELOC we moght yet see a reduction of reserves.<BR/><BR/>MBIA presents q2 tomorrow, will be interesting to compare and contrast...Anonymousnoreply@blogger.com