Posted on 02/23/2008 2:52:20 PM PST by nicmarlo
Ambac Financial Group, the embattled bond insurance company, plans to split itself in two in a bid to safeguard its top credit ratings and avert losses on securities that it guarantees for big banks.
The company also hopes to raise $3 billion to bolster its finances, a person who has seen Ambac’s plans said Friday. An announcement could come as early as Monday, assuming credit ratings agencies approve the measures.
(Excerpt) Read more at nytimes.com ...
ping!
Nice technique.
The news that lead to a 200 point turn around in the DOW late Friday before the close.
We’ll see what Monday brings.
By separating the toxic waste (CDO’s) from the monolines...I can’t see that this is going to be good news, as who will want the crap that will then be downgraded? And then there’s the later bank writedowns....and then there are the likely lawsuits....
“The plan to shore up the guarantors is also critical for banks like Citibank, UBS and Merrill Lynch. If the firm that insures their collateralized debt obligations and other securities does not have a high credit rating and substantial capital, the banks would have to acknowledge substantial losses in their portfolios.”
Yup. Can’t have that.
So they are breaking into two entities; one covering munis and one covering private CDOs.
They want to safeguard the shareholders, but who is going to hold the bag?
Yeah........wonder what the judges will say when the lawsuits begin to be filed.....class actions/en masse?
Good question. And the banks are deciding what to do.
This shell game is only stalling the inevitable.
Darn. I wish I was a lawyer. There's a billion dollar pay day here. Easy money for some lucky law firm.
Between the government bail out of the mortgage holders ostensibly through Fannie Mae, and now the hot potato throw with the monolines, do you get the sense that this is inflationary as hell?
There’ll be pay days for some......and, unfortunately, a big shock for others along with huge losses.
There’s definite inflation going on. And if the Feds keep putting money into the markets...that’s more inflation.
So long as they continue to manipulate the long bond lower and make the yield curve more steep, the economy will be just fine.
I remember reading something about that some time ago....to answer your question, thought, I can’t recall the specifics.
How else do you keep the Ponzi scheme going? The Financing-Debt Complex will not be denied! "There must be IRCs circulating somewhere, I just know it!"
That’s only what they want you to think.
That’s not the reality of the situation, though. This is smoke and mirrors as they try to find how to fix what cannot be fixed.
got that right.
“The plan to shore up the guarantors is also critical for banks like Citibank, UBS and Merrill...
One last thought. If these three funnel loans to the monolines, then intend to take the segregated muni portfolio as collateral on the funds, won’t that leave the hedges and other mutual funds holding the bag consisting of toxic waste and thus giving the shareholders, the least able to absorb a loss, the finger?
They intend to shovel the loss onto everybody else and cover their rumps.
I would do it this way, but for my conscience and a sense of morals and ethics and an uncompromising belief that what goes around will eventually come around either in this life or the next.
Got a pitchfork?
Bingo!
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