Looks like Ambac - the bond insurer that has been savaged by it's very poor investment decisions, incompetent management and credit default swaps - is getting ready to go tits up, while Bernanke cheerleads the lemmings off the cliff in front of Congress. ABK's stock is currently down 37% on volumn that will end up today well over 3x the average daily volumn for the past 10 trading days.
Here's the article link courtesy of a commentor: ABK = R.I.P. The collateral effect of this situation could be quite staggering - the financial equivalent of the BP oil catastrophe - as this will potentially trigger $100's of billions in related credit default swaps and other toxic derivative transactions. Muni paper, the largest beneficiary of ABK credit protection, could face staggering losses.
Ambac was one of the major beneficiaries from the $800 billion TARP and $1.25 trillion in toxic bond purchases by the Fed, as that monetization prevented the triggering of ABK's absurdly large portfolio of credit default swaps related to the Company's horrific investment decisions over the past 10 years. I guess Banana Ben is too busy working out the details of his next helicopter drop to be bothered with specific details about why he looked like an utter idiot in front of the public today. Got gold?
Wednesday, June 9, 2010
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