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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Giordano Bruno who wrote (104429)2/12/2008 8:24:19 AM
From: Think4YourselfRead Replies (2) of 306849
 
Buffet ain't no fool. For one he is offering to do nothing about their CDO problem, so they are still going to collapse. What he is doing is offering to reinsure the muni paper for a premium to be paid by the monolines.

You might want to ask yourself why the monolines would do something so foolish? The theory is that they have so many liabilities that their ratings are certain to be cut. By reinsuring with Buffet they essentially remove the muni liability from their balance sheet. It's a load of manure.

IMHO the monolines would be incredibly foolish to take Buffet's offer. It takes away cash they will desperately need to remove a liability that really doesn't exist. Muni's almost never default. It's the CDO side causing all the problems, and Buffet is too smart to touch any of that toxic waste.

The premarket is TOTALLY clueless and bidding up the monolines. IMO this is a great shorting opportunity.
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