Comments on: What Good Is Bond Insurance Anyway?

By: Ursa minor

Ursa minor — Thu, 10 Jan 2008 02:53:10 +0000

Carney, if you think the State of California is a great credit, I have a bridge to sell you.
@ 4:27– they’re on the hook for something like $30mm a year in interest on the 2039 & 40 maturities and principal on zeros (the deal was structured w. like $4mm/yr in zeros maturing annually from now until the return of Christ or something). Not a huge number for them BUT– how many other deals like this did they insure?
Has me wondering what the scrap value of the damned thing is.

By: Anonymous

Anonymous — Wed, 09 Jan 2008 21:27:01 +0000

Monorail – Not an issue, but a timely story. Yeah they created a reserve last year, but the default was (almost) yesterday.
Alot more interesting than another tired old, mis-reported CDO story.
and yeah, all all they have to pay is scheduled interest until maturity, so nobody worry. also countrywide is flush, don’t worry about that either.

By: God

God — Wed, 09 Jan 2008 20:27:05 +0000

The monorail bonds are insured by AMBAC

By: Adam

Adam — Wed, 09 Jan 2008 19:01:41 +0000

the article above says “MBIA revealed that it was making a $3.3 billion mark-to-market adjustment in it’s CDO portfolio, meaning that it estimates that it’s CDO portfolio’s value fell by that much in the past quarter.”
This couldn’t be more wrong. the M-T-M adjustment has to do with the fair value of their insured CDS portfolio related to CDO / CDO of ABS, etc. That number will go to ZERO as the exposure runs off (this is a temp adjustment to their books). Writedowns have to do with the value of the security, eg, if it is expected to pay back less than 100 cents on the dollar, then you writedown the value

By: Anonymous

Anonymous — Wed, 09 Jan 2008 18:44:07 +0000

The monorail is a non-issue. Ambac had already reserved for it earlier in 2007. Plus, principal is not due for 40 years.

By: 1-2

1-2 — Wed, 09 Jan 2008 18:19:14 +0000

Does anyone else find it ironic that a MONOline insurer is in trouble from a MONOrail??
With that in mind i give you this (god it’s sweet to know you’re leaving your firm and have nothing better to do):
Lyle Lanley: Well, sir, there’s nothing on earth
Like a genuine,
Bona fide,
Electrified,
Six-car
Monorail!
What’d I say?
Ned Flanders: Monorail!
Lyle Lanley: What’s it called?
Patty+Selma: Monorail!
Lyle Lanley: That’s right! Monorail!
[crowd chants `Monorail' softly and rhythmically]
Miss Hoover: I hear those things are awfully loud…
Lyle Lanley: It glides as softly as a cloud.
Apu: Is there a chance the track could bend?
Lyle Lanley: Not on your life, my Hindu friend.
Barney: What about us brain-dead slobs?
Lyle Lanley: You’ll be given cushy jobs.
Abe: Were you sent here by the devil?
Lyle Lanley: No, good sir, I’m on the level.
Wiggum: The ring came off my pudding can.
Lyle Lanley: Take my pen knife, my good man.
I swear it’s Springfield’s only choice…
Throw up your hands and raise your voice!
All: Monorail!
Lyle Lanley: What’s it called?
All: Monorail!
Lyle Lanley: Once again…
All: Monorail!
Marge: But Main Street’s still all cracked and broken…
Bart: Sorry, Mom, the mob has spoken!
All: Monorail!
Monorail!
Monorail!
[big finish]
Monorail!
Homer: Mono… D’oh!

By: Anonymous

Anonymous — Wed, 09 Jan 2008 18:16:44 +0000

Dewey defeats Truman!

By: Anonymous

Anonymous — Wed, 09 Jan 2008 18:15:22 +0000

Fascinating piece. I hear there’s two Bear Stearns hedge funds that might have some troubles. I hope CFC doesn’t have troubles.

By: just me

just me — Wed, 09 Jan 2008 17:21:48 +0000

I will gladly insure any issuer, on any amounts. Please pay all premiums before the bond is issued to my account in Havana.
Thank you – you are account #1.

By: Anonymous

Anonymous — Wed, 09 Jan 2008 17:15:55 +0000

hmmm .. you are saying if MBIA goes bankrupt?

By: Master of None

Master of None — Wed, 09 Jan 2008 17:09:28 +0000

Maybe now is a good time to talk about credit default swaps?
I mean… does anyone really think that counterparties are going to be able to pay up if any of these companies actually go bankrupt?

By: Anonymous

Anonymous — Wed, 09 Jan 2008 16:55:05 +0000

uh, the point of raising capital is so that it DOES have the ability to pay claims. the answer is the value of the insurance is whatever you pay for it. the market has repriced to the exigency of the situation long ago

By: Anonymous

Anonymous — Wed, 09 Jan 2008 16:54:12 +0000

are you at all familiar with the LV monorail? that story’s a little more 2008.

By: Anonymous

Anonymous — Wed, 09 Jan 2008 16:44:25 +0000

seriously
have you been in a coma, carney?
you’re about a month late with this

By: Anonymous

Anonymous — Wed, 09 Jan 2008 16:40:37 +0000

Looks like someone was watching CNBC this morning. Not a very original post Carney…