Quote:
Originally Posted by teomaxxx
Yesterday and today decline isnt mainly about recession, its mainly stupid market who finally figured out, that two of the biggest monoline insurers (ABK, MBI) are going under...as their every other competitor already did it.
these two companies, with 1.5 bilion market cap, insure around 1.2 trilion of debt.
http://finance.yahoo.com/q/bc?s=MBI&...=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=ABK&t=3m
"Losing the AAA stamp would cripple the bond insurers and throw doubt on the ratings of $2.4 trillion of debt the industry guarantees, causing as much as $200 billion in losses, according to data compiled by Bloomberg."
Their current AAA ratings are biggest joke ever and once they are done (MBI, ABK) and bankrupt, you can talk about immediate 100$ billion write-off in financial industry.
That day wont be great for any stock. |
I should mention that ABK was downgraded to AA just before close on friday. I fully stand behind what I stated here, the downgrade is just start of future 100$ billion write-off in financial industry. and everyone knows that ABK, MBI insurance is worth shit.
You better read this article to understand what whole game is about.
http://www.washingtonpost.com/wp-dyn...011803592.html
"Everyone thinks they're looking at the cliff over Armageddon," said Ed Rombach, senior derivatives analyst at Thomson Financial. "If you think the write-downs have been bad so far, the next write-downs could be twice as big."