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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%Jan 9 4:00 PM EST
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To: KyrosL who wrote (67537)10/25/2010 12:14:48 PM
From: Hawkmoon1 Recommendation  Read Replies (1) of 219225
 
Aren't they effectively bankrupt?

Technically ABK is in run-off.. Insurance companies, so I've read, are not permitted to go bankrupt.

ABK recently received cooperation from Wisconsin insurance regulators to segregate their impaired MBS related obligations into a segregated account. It's still awaiting final court approval on a settlement (you can check the past couple of months of ABK news for more info).

It's a high-risk, high-reward play.. But the more they can commutate their insurance obligations on these fraudulent MBS, the more money they can upstream back to their municipal bond insurance business (which is also critical to an economic recovery).

I see that MBI is consolidating today.. I'll be looking for a good technical buy in point for it soon.

The ultimate reason, IMO, to expose ourselves to the monolines is that their litigation and resulting discovery is the "tip of the spear" towards uncovering this mortgage fraud. Then the investors, including Fannie and Freddie, will be citing what the insurance companies have been uncovering.

There's going to be a settlement coming IMO.. BAC and the other TBTF banks can't handle the continuing pressure that will bear on their market caps as more of this stuff comes out.

Hawk
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