Alea

Monolines: Back to Hell

Graphs: CMA DataVision

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Posted by jck at 11:09 am EST on April 23rd, 2008 |

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5 Responses to “ Monolines: Back to Hell ”

# 1 MA Says:
April 23rd, 2008 at 11:53 am

Charts for Dummies: Could someone explain to me how to read these charts?

# 2 jck Says:
April 23rd, 2008 at 12:20 pm

It is the annual spread in basis points that you would pay to insure $100 of debt or loan against default.
Ex: 790 means 7.90% to insure 100 worth of debt.
Big number is bad [and not consistent with a triple A rating I might add].
Low number is better.
The 2 graphs show that the monolines are worst off than earely in the year despite having raised some capital to maintain their credit rating.

# 3 Looks like « a neoconservative, mugged by Hobbes Says:
April 23rd, 2008 at 1:51 pm

[...] 23, 2008 by E. Cartman the monolines (Ambac and MBIA — remember them?) are going to be the next “crisis” … [...]

# 4 Aiden Says:
April 23rd, 2008 at 10:10 pm

The 2037 Ambac’s are trading as if they were CCC rated (or moody’s Caa3-ish), and the CDS’s are trading on an upfront basis: http://www.reuters.com/article/comktnews/idUSN2345078820080423?rpc=77
Looks like junk to me. I wonder who has the most exposure to ABK? More capital raising to be had by all!

# 5 julio_lugo Says:
April 26th, 2008 at 3:57 pm

A buddy of mine claims that, because of the CDS market, monoline insurance is an outdated business model, that will go the way of video rental stores. Any truth to this?

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