Thursday, October 25, 2007

MBIA / Denial ?

I´m no expert on this kind of financial alchemy. But the common sense tells me that with over $115 billion in CDO & $ 49 billion in RMBS exposure ( see pfd Subprime RMBS Conference Call Presentation ) and after some of the news we have heard on a daily basis from all over the world for months now the view from MBIA doesn´t sound "conservative"..... The fact that MBIA insures well over $ 600 billion in total with just $ 7 billion in capital and their bonds are traded as junk doesn´t give me much comfort either....

Ich bin definitiv kein Experte in Sachen Finanzakrobatik. Ader der gesunde Menschenverstand sagt mir das mit Engagements von 115 Mrd $ in CDO´s und 49 Mrd $ im Hypothekenmarkt ( siehe PDF Subprime RMBS Conference Call Presentation ) und unter dem Eindruck der ganzen Horrormeldungen die uns jetzt seit Monaten heimsuchen die Auslegung von MBIA nicht sonderlich konservativ anmuten.....Das MBIA insgesamt für über 600 Mrd $ and Krediten mit knapp 7 Mrd$ an Kernkapital gerade steht & die deren eigene Anleihen mit junk gehandelt werden ist auch nicht gerade vertrauenserweckend....

MBIA Inc. Reports
The decline was due to a pre-tax net loss of $352.4 million, or $1.80 per share, that the Company recorded in the third quarter on financial instruments at fair value (“marked-to-market”) and foreign exchange.

The loss was a consequence of wider spreads affecting the valuation of the Company’s structured credit derivatives portfolio. Compared with the previous quarter, spreads widened significantly on Commercial Mortgage-Backed Securities (CMBS) collateral and on other asset-backed collateral in the Company’s structured credit derivatives portfolio.

The Company believes that the “mark-to-market” loss does not reflect material credit impairment.

> Lets hope the rating agencies are on top of this......

> Bleibt zu hoffen das die Ratingagenturen diesesmal auf der Höhe sind......

Got gold.....?

UPDATE:

I have just listened to the 120 minues conference call. Maybe it is not bad to have common sense.......

Ich habe mir gerade knappe 2 Stunden den Conference Call angetan. Nach dieser Erfahrung muß ich sagen das ich doch lieber beim gesunden Menschenverstand bleibe.....

MBIA Plunges After Stock Buyback Halted, First Loss

``I'm still trying to understand how the guarantors can take such low levels of mark-to-market losses relative to what the rest of the Street is taking on securities,'' said Ken Zerbe, an analyst with Morgan Stanley in New York said during the call.

Naked Capitalsim Worries About Monoline Insurers Grow

> It looks i´m not the only one wondering........

> Sieht ganz so aus als wenn ich nicht der einzige bin der sich verwundert die Augen reibt.....

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3 Comments:

Blogger jmf said...


REITs Suffer Biggest Decline Since 1998 as U.S. Rout Deepens

7:20 AM  
Blogger jmf said...

John Succo / Minyanville


Why Is MBIA Down So Big?

11:05 PM  
Blogger jmf said...


Moody's Cuts Ratings on CDOs Tied to Subprime Bonds


Securities with ratings as high as AAA from at least 45 CDOs were either cut or put on review for a downgrade, according to individual statements distributed today by the New York-based ratings company. Moody's didn't release a summary.

I would love to know if any MBIA tranches are involved.....

4:44 AM  

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