Risk and Return

MBIA has been downgraded by Moody’s all the way to A2. Ambac is AA3. That makes their insurance useless, and in all probability that means they are now nothing more than vehicles for paying off the claims of their existing contracts. The Muni issuers will terminate their contracts, the underlying credits are already better than [...]

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Bad news for the monolines. FGIC just got downgraded today to AA. That pretty much puts them out of the business of insuring municipal bonds.
NYS Commissioner of Insurance has suggested splitting the Muni bond business from the rest of the insurers. FGIC seems to now think that isn’t a bad idea. Of course, since Elliot [...]

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Much of what has been happening over the last year in the credit markets was foreseeable, if not assured. I will admit though, I hadn’t really considered this aspect.
A while back MBIA, AMBAC and other monoline insurers backed sleepy municipal bond portfolio’s. Having entered, and then become ensnared, in the broader credit markets, they face [...]

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The GDP numbers came out yesterday. For a breakdown, including the inflation component, go here. For the announcement from the BEA go here. The Fed also cut rates by 50bps. Here is the Journal’s story.

Reactions:
Barry Rithotlz- Q4 GDP: El Stinko!
• Consumption slowed to 2% from 2.8% in Q3; I suspect that only partly reflects real [...]

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