Comments on: MBIA Lies in Attack on New York Times

By: Richard Kline

Richard Kline — Fri, 20 Jun 2008 05:26:00 +0000

So Lune, I’m in complete agreement with both ends of your post. If there is one, clear, potent area where a _direct government guarantee_ is warranted in an otherwise presently illiquid market, it’s a guarantee of existing muni bonds. Now, falling revenues will drive up losses on some of those issues, but the municipal bond market is of intrinsic importance to the country, and it’s total _mismanagement_ by private capital all but demands government intervention.

And given the indictments we now have of comparatively small time liars at BSC’s captive balloon hedgies, it would do well for every coporate officer of MBIA, Ambac, Lehman’s, Citi, and their ilk to closely reconsider whether or not their public statements are, ahh, less than fully candid. If anything, _anything_ in Lehman’s recent statements about their asset and capital levels turns out to be massaged to make their likely losses appear smaller than they prove to be, I hope and pray for a plague of prosecutors upon senior management there. And MBIA: don’t be thinking about purging any email on this equity raise of 08, now. Long after the wreakage of your dead firms is bulldozed from the econoscape, some of your top names may very well be choosing which side to play in Lay’s Dilemma. . . . Ken Lay.

By: Anonymous

Anonymous — Thu, 19 Jun 2008 23:07:00 +0000

I guess Moody’s finally decided to take the plunge and downgrade these “fellow” crooks!

By: Lune

Lune — Thu, 19 Jun 2008 18:40:00 +0000

I hate how bond insurers are holding munis hostage in their attempts to extract as much money as possible from the markets and from the public to line their golden parachutes.

It's even worse when you remember that the munis aren't in trouble, and fail at a much lower rate than even AAA-rated corporate bonds. So they don't actually *need* much insurance.

The govt should just call MBIAs bluff, and announce that they will guarantee every muni bond that MBIA currently insures, then shut the company down. The amount of defaults they'll have to cover in the muni market will be tiny compared to the amount that these crooks are trying to extort.

Also, I for one am glad that MBIA's head officials continue to make statements that are so blatently false and continue to piss of their regulators. BSC's head fund managers were doing the perp walk yesterday for far less antagonistic behavior. As soon as the SEC gets done with BSC, every single one of these statements will be used to do the same to these guys. So keep going, MBIA. Tell all your shareholders that everything is fine and dandy. They'll repay you with lawsuits and jailtime soon enough.

By: stuart

stuart — Thu, 19 Jun 2008 18:10:00 +0000

Those who cannot see MBIA is “toast” are either willfully blind, complicit in MBIA’s deceit or naive beyond description. MBIA’s management raised the funds for a stated purpose, now they are backing out to keep it for themselves under the rouse that it’s in the better interest of shareholders after the stock has since fallen 95%! Gimme a break. Corrupt, lying thieves. Time to call a spade a spade and quit with the political niceties.

By: Anonymous

Anonymous — Thu, 19 Jun 2008 16:46:00 +0000

I'd still like to know, or get feedback on the legal constraints and mechanism by which a corporation like MBIA or Ambac can make a choice to not use rating agencies.

It seems to me that rating agency actions are a basic issue which must start with incorporation articles and obligations to fiduciary responsibilities -- which by law require these companies to use every rating agency.

What is going on?

By: insurance guy

insurance guy — Thu, 19 Jun 2008 16:40:00 +0000

stuart,

While it may be apparent to you that the company is toast, there are certainly people out there with different opinions.

The bottom line from my perspective is that if management doesn't think it can help shareholders by downstreaming the funds, then they shouldn't downstream the funds.

By: Anonymous

Anonymous — Thu, 19 Jun 2008 15:24:00 +0000

“There’s not likely to be a man left standing” in the bond insurance industry, Ackman said. “This thing is over already, the market just doesn’t know it yet.”

By: Jon Shayne

Jon Shayne — Thu, 19 Jun 2008 15:14:00 +0000

Gretchen Morgenson is a national treasure, in my view.

By: Ginger Yellow

Ginger Yellow — Thu, 19 Jun 2008 14:30:00 +0000

That’s got to be the lamest pushback I’ve ever seen. They’re contradicting themselves in successive sentences.

By: tomd

tomd — Thu, 19 Jun 2008 13:00:00 +0000

Insurance guy: would it be too much to ask MBIA to return the money (rescission) since it was raised for the purpose of holding onto (bogus) AAA ratings that are now out of reach, even with the money?