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Johnnybags
01-17-2008, 10:26 AM
is huge news, they cannot continue business without AAA rating, they are insolvent and will cause the SIV insurance and conduits on many bank books to be virtually uninsured, municipalities will not be able to raise funds without paying way up for insurance, technically putiing them out of the muni bond business for awhile. This is huge news that virtually noone is reporting on the consequences.

jacmicwag
01-17-2008, 10:27 AM
Further translation for average Joe?

WilliamC
01-17-2008, 10:30 AM
Link?

Johnnybags
01-17-2008, 10:36 AM
Further translation for average Joe?

your local projects that use muni bond financing are going to slow dramatically, localities will try to raise taxes, many banks are now uninsured for losses which leaves them open for billions more. And many of these off balance sheet bank transactions that use insurance are now likely to come back on the books the minute they underperform. Many credit card pools, student loan pools are now vulnerable to the banks. MBI and ABK the biggest insurers have no money to pay off. Cost of insurance for these things will soar, leaving the business model obsolete.

azminuteman
01-17-2008, 10:37 AM
Further translation for average Joe?

If there is no gold to back your money, guess who does.
Your paper dollar is really just a piece of paper or a note that says X value of note is backed by Y.
Y used to be gold, now it is a system that trades numbers based upon figures.
The figures that back the numbers that our notes are based on are going bankrupt because of basically a debt to income ratio.

freelance
01-17-2008, 10:39 AM
Here are a couple of links:

http://www.urbandigs.com/2007/11/first_bond_insurer_close_to_in.html

http://news.goldseek.com/GoldenJackass/1198245060.php

Johnnybags
01-17-2008, 10:46 AM
and give the profits to Paul.