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To: reaper who wrote (203644)	11/8/2002 10:09:04 PM
From: HomeBoy Security	Respond to of 436258

IT'S THE DARK SIDE OF THE WOMB...

To: reaper who wrote (203644)	11/9/2002 1:35:32 AM
From: Ken98	Respond to of 436258

"De-capitalized"? or "De-capitated"? <g> <<it is therefore my opinion that in a deflation the credit guarantors will be de-capitalized.>>

To: reaper who wrote (203644)	11/9/2002 11:21:42 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 436258

Reap, Here is where we disagree. The average muni that MBIA and the others insure to AAA are natural A rated securities. Since Alternative Minimum Tax knocks out most of the real risky munis, they are still good investments. The default rate on munis was low even during the Depression. Da rich folk gotta clip their coupons and nothing bad ever happens to them. Most citizens will have to pay sales tax for necessities no matter how poor they get. And most will pay property taxes on their homes, even if they default. The lender loses, but the Sheriff sells the house for a minimum of the property taxes. And, despite a Republican victory, the schools will still receive enough taxes to pay the interest on their bonds. BTW, this is a low risk, very profitable biz. If MBIA and Ambac go under, my guess is that GE, still able to borrow at low, low rates, will pump more money into FGIC to take over the obligations (and the fees).