FOMC Rate Cut; FGIC Downgrade; MBIA; Ambac
Cut all you want...
FOMC cut the fed funds rate by 50 bps to 3.00% and the discount rate by 50 bps to 3.50%.
"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households.
Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets."
Guarantor Downgraded... Financial Guaranty Insurance Co., the world's #4 bond insurer,
had its credit rating cut to AA from AAA by Fitch Ratings.
FGIC is controlled by PMI Group Inc., Blackstone Group LP, and Cypress Group.
MBIA & Ambac in grave... situation... A CNBC commentator said activist investor and insurer short seller Bill Ackman...
is writing a letter to the NY State Insurance Commissioner saying that the insurers' situation is far worse than previously stated.
MBIA and Ambac, the two largest bond insurers, may each lose $11.6 billion...
on guarantees of residential mortgage securities and some collateralized debt obligations, according to hedge fund manager Ackman.
Ackman said they are underestimating potential losses at MBIA and Ambac by relying on after-tax results,
failing to update ratings on reinsurers of bond insurance and ignoring the slide in the commercial mortgage-backed securities market.
FOMC cut the fed funds rate by 50 bps to 3.00% and the discount rate by 50 bps to 3.50%.
"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households.
Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets."
Guarantor Downgraded... Financial Guaranty Insurance Co., the world's #4 bond insurer,
had its credit rating cut to AA from AAA by Fitch Ratings.
FGIC is controlled by PMI Group Inc., Blackstone Group LP, and Cypress Group.
MBIA & Ambac in grave... situation... A CNBC commentator said activist investor and insurer short seller Bill Ackman...
is writing a letter to the NY State Insurance Commissioner saying that the insurers' situation is far worse than previously stated.
MBIA and Ambac, the two largest bond insurers, may each lose $11.6 billion...
on guarantees of residential mortgage securities and some collateralized debt obligations, according to hedge fund manager Ackman.
Ackman said they are underestimating potential losses at MBIA and Ambac by relying on after-tax results,
failing to update ratings on reinsurers of bond insurance and ignoring the slide in the commercial mortgage-backed securities market.
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