SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The coming US dollar crisis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: ggersh who wrote (18072)3/2/2009 3:01:31 PM
From: Hawkmoon  Read Replies (1) of 71475
 
Agreed about the IB's and Rating Agencies, but still the Insurers should have done some Due Diligence.

Totally agree.. And I'm sure some of their own analyst models were contrary to those of the RA's/IB's..

But what could they do? If they didn't write insurance, they couldn't sustain their business operations and it would have set them up in a confrontational stance against the preeminence of the RA's.

You just don't stay in the "good graces" of the RA's by contradicting their analyst models and you find business (and the supporting capital) going to those insurers who will "play ball"..

But it still doesn't negate the victimization of the insurers. In fact, it only emphasizes how the RA's stopped working for the financial surety and investors and colluded with the issuers.

And now they are suing/negotiating with the banks to force them to share the cost for covering those loans which were fraudulently originated to those without the ability to pay. The majority of the voting rights to those CDOs are held by the insurers and the banks can't sell them off until the claims against the insurers are commuted.

The insurance industry, so critical to diversifying financial risk and underwriting new debt issuance, is a mere skeleton of it's former self. And I opine that the financial system will not right itself until we have a strong insurance revival that provides both financial surety, as well as price discovery for valuing assets (necessary to assess risk premiums).

Bottom line.. the RA's need to work for the insurers who guarantee these debt offerings, not the Banks.

Hawk
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News