Comments on: MBIA Refuses to Downstream Cash, Uses CDS Fears to Defy Regulators http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html Thu, 11 Mar 2010 15:26:13 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Matt http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9943 Matt Mon, 23 Jun 2008 13:45:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9943 One phrase in MBI's recent bland assurance that they have sufficient capital to meet the acceleration clauses on these swaps is that they have "10.2 billion in securities with an AVERAGE AA rating".<br/><br/>We know what "average" probably means here.<br/><br/>For example, 10 bonds worth only 10,000 dollars each that are rated just one notch above AA and 10 bonds worth 100 MILLION dollars that are rated just one notch BELOW AA would "satisfy" the above statement, even though the practical result is that the vast majority of the alleged "collateral" is rated below AA. <br/><br/>Given MBI's record of dissembling, it seems highly likely that a large part of that 10.2 billion figure they cite is BELOW AA and will therefore be insufficient as collateral. <br/><br/>The key weasel fudge word MBI uses here is "average". Precisely what is being averaged? One phrase in MBI’s recent bland assurance that they have sufficient capital to meet the acceleration clauses on these swaps is that they have “10.2 billion in securities with an AVERAGE AA rating”.

We know what “average” probably means here.

For example, 10 bonds worth only 10,000 dollars each that are rated just one notch above AA and 10 bonds worth 100 MILLION dollars that are rated just one notch BELOW AA would “satisfy” the above statement, even though the practical result is that the vast majority of the alleged “collateral” is rated below AA.

Given MBI’s record of dissembling, it seems highly likely that a large part of that 10.2 billion figure they cite is BELOW AA and will therefore be insufficient as collateral.

The key weasel fudge word MBI uses here is “average”. Precisely what is being averaged?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9717 Anonymous Wed, 18 Jun 2008 16:19:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9717 "This is clearly a stalling action to keep as much cash as possible at the parent level to maintain the employment of and benefits to the executives." <br/><br/>Quelle Surprise? “This is clearly a stalling action to keep as much cash as possible at the parent level to maintain the employment of and benefits to the executives.”

Quelle Surprise?

]]> By: daveNYC http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9714 daveNYC Wed, 18 Jun 2008 14:32:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9714 <i>The parallels to Lehman's chicanery is striking. Keep putting more lipstick on that pig boys.</i><br/><br/>From what I've read there's one major difference between Lehman and MBIA and BSC. Lehman hasn't managed to entangle itself so tightly into any one market segment so as to make it's failure a life threatening danger to that segment.<br/><br/>The lesson, obviously, is for all financial companies to maximize the risk that their failure would pose to the financial system, thereby forcing regulators/the market to cut them as much slack as possible, including quasi-rescues as in the case of BSC. The parallels to Lehman’s chicanery is striking. Keep putting more lipstick on that pig boys.

From what I’ve read there’s one major difference between Lehman and MBIA and BSC. Lehman hasn’t managed to entangle itself so tightly into any one market segment so as to make it’s failure a life threatening danger to that segment.

The lesson, obviously, is for all financial companies to maximize the risk that their failure would pose to the financial system, thereby forcing regulators/the market to cut them as much slack as possible, including quasi-rescues as in the case of BSC.

]]> By: Stuart http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9712 Stuart Wed, 18 Jun 2008 13:46:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9712 "“It would be surprising to me if it would be successful,” Mr. Miller said. “It will still be an MBIA-insured bond and then reinsured also by MBIA, but MBIA as a new company.”"<br/><br/>The parallels to Lehman's chicanery is striking. Keep putting more lipstick on that pig boys. ““It would be surprising to me if it would be successful,” Mr. Miller said. “It will still be an MBIA-insured bond and then reinsured also by MBIA, but MBIA as a new company.””

The parallels to Lehman’s chicanery is striking. Keep putting more lipstick on that pig boys.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9710 Anonymous Wed, 18 Jun 2008 13:24:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9710 It's called extortion. This is what is disgusting everyone about "Anglo-American Finance" these days. It's one giant circle of extortionists. Sorry, but someone needs to finally have the guts to say no. I doubt DiNallo will be the one as he's way too political. It’s called extortion. This is what is disgusting everyone about “Anglo-American Finance” these days. It’s one giant circle of extortionists. Sorry, but someone needs to finally have the guts to say no. I doubt DiNallo will be the one as he’s way too political.

]]> By: Francois http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses.html#comment-9700 Francois Wed, 18 Jun 2008 06:11:00 +0000 http://www.nakedcapitalism.com/2008/06/mbia-refuses-to-downstream-cash-uses-cds-fears-to-defy-regulators/#comment-9700 What is there to say?<br/><br/>No one wants to see the Ponzi scheme fall apart, but our markets are "fundamentally strong", the "best in the world". Riiiight!<br/><br/>I do not want to see a financial meltdown triggered by this saga or anything similar. That said, we might NEED to get to that point to truly have a much needed overhaul of the FIRE sector.<br/><br/>Whatever happens, it will be very ugly and painful. Of course, those most responsible for these successive clusterfucks will do whatever it takes so that, we, the people, pick up the tab while they keep all their profits.<br/><br/><br/>Now, explain to me why the very people who think left-wing politics are soooo bad are doing everything in their power to bolster its second coming? What is there to say?

No one wants to see the Ponzi scheme fall apart, but our markets are “fundamentally strong”, the “best in the world”. Riiiight!

I do not want to see a financial meltdown triggered by this saga or anything similar. That said, we might NEED to get to that point to truly have a much needed overhaul of the FIRE sector.

Whatever happens, it will be very ugly and painful. Of course, those most responsible for these successive clusterfucks will do whatever it takes so that, we, the people, pick up the tab while they keep all their profits.

Now, explain to me why the very people who think left-wing politics are soooo bad are doing everything in their power to bolster its second coming?

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