Bond insurers MBIA, Ambac post bigger losses; shares dive(derivatives again)

Market Watch ^ | 11/05/08

[TigerLikesRooster]

Bond insurers MBIA, Ambac post bigger losses; shares dive

By MarketWatch

Last update: 9:54 a.m. EST Nov. 5, 2008

BOSTON (MarketWatch) -- A pair of bond insurers saw their stocks plunge Wednesday morning after they reported wider quarterly losses as the companies continue to get buffeted by their exposure to complex credit derivatives linked to the sagging housing market.

Ambac Financial Group Inc. (ABK AMBAC Inc) said its third-quarter loss widened to $2.43 billion, or $8.45 a share, from a $360.6 million, or $3.53 a share, loss. Chart of ABK

The company blamed the bigger loss on hits from credit derivatives, increased loss provisioning primarily related to second-lien residential mortgage-backed securities (RMBS) insurance transactions and market losses on RMBS within the financial services investment portfolio.

Its operating loss was $7.81 a share, against the 74 cents a share loss that analysts forecast by FactSet estimated. Shares of Ambac were off more than 20% in early trading Wednesday.

Ambac in late October asked the Treasury Department to guarantee bond insurers' securities and also portfolio losses to a certain point, under the Treasury's financial rescue plan. The company recently named a new chief executive, David Walli

[TigerLikesRooster]

We have a nice chopping block called derivative implosion.
A trap waiting for Dems.

[RSmithOpt]

Still, no immediate action by the SEC, Congress, W, BO, local dog catcher, etc., with respect to derivatives transparency, CDS valuations, etc....we ain’t seen nuttin’ yet...hold on for the ride...all down hill from here and gaining speed.

[TigerLikesRooster]

Let them throw more money at the problem. Let them go all the way to demand resuscitation, even before puffed-up credit is cleansed out of the system. Our problem has been that we had way too much consumer demand over and beyond our ability to pay for it. It will only make things worse. Let them be all Keynesian, and make the blunder of spending their way out of this, hoping that they could get out of it in two years if they "play our card right."

When their prescription fails miserably, let them taste their own bitter medicine, and we can watch the spectacle. We need some entertainment. I could manage to get my own bread, but can't get my circus event on my own. Maybe they can provide it for me.:-)

[RSmithOpt]

Yes, they have provided us with the circus event....it's called the election results......like under Klintoon, the Dems & MSM will do their best to paint a rosey picture to persuade the ignorant dumb consumer to spend spend spend, while they (the goobermint) leads the way over the cliff.

Next sector run up??? Who knows,a but, the market and the gov will create one, regardless.