ABK and MBI out of business

Discussion in 'Trading' started by MrDODGE, Jun 5, 2008.

  1. Their ratings were just cut to AA by S&P.

    Moodys to follow in the next couple days.
  2. capmac


    ABK AMBAC Fincl and MBIA ratings lowered at S&P (2.30 -0.21) -Update-

    S&P lowered its financial strength ratings on Ambac Assurance and MBIA Insurance(MBI) to 'AA' from 'AAA' and placed the ratings on CreditWatch with negative implications. The ratings on the holding companies, Ambac Financial Group and MBIA have also been lowered to 'A' and 'A-' from 'AA' and 'AA-', respectively, and placed on CreditWatch with negative implications. The rating actions on the cos reflect belief that these entities will face diminished public finance and structured finance new business flow and declining financial flexibility. In addition, S&P believes continuing deterioration in key areas of the U.S. residential mortgage sector and related CDO structures will place increasing pressure on capital adequacy. The 'AA' financial strength ratings of these companies are supported by currently sound claims paying ability and liquidity levels in our opinion. Resolution of the negative CreditWatch will be dependent on clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments.
  3. MBI was up 2% after the initial reaction!!!!

    Wow.... I guess people smell bailout... not sure how you can short the rumor buy the fact when the fact is bk!?!?

    This market feels like it has some moves up its sleeve that I haven't seen yet!!!
  4. Just a s I thought.... smoething stunk on that sell off.

    Market Is going to break the highs!!!!!

    This market has some moves baby!!

    Now we just need LEH downgrades and the XLF will rally too!!!

    Gotta love trading baby!!!
  5. The Fed bails everyone out. There is no reason for a company not to take on as much risk as possible. If something goes the wrong way in the future they will be bailed out by the government.
  6. Financials are breaking out too!!!

    The market loves to trick people. If they can't fool traders and whipsaw them they make more money so they strive to do it as much as possible.

    I honestly thought this downgrade would cause some number crunching on the financials. But I guess this was "priced in"

  7. Only if its bankruptcy can cause a financial meltdown/chainreaction due to counterparty risk. LEH would be a candidate.

    MBI/ABK disappearing is pretty much a concensus for months now. No bailout because it has little real life impact on the overall health of the global financial system at this point.
  8. Trade PRICE.
    Not the news.

    Pretty simple, but so many people here on ET continue to bang the "Gloom & Doom" drum.
  9. market up, no one cares