RE: Bond Insurance "No Good" with Buffett EntryDo you mean that it won't go to $65? Well, maybe it won't, but the stock going up or down on any given day doesn't mean a major trend change occurs. Still think heading for $65 is likely, but not a given.
With the Buffett news and the collpase of MBI and ABK share prices I believe these two biggest insurers will be downgraded soon. that will start a major ripple effect on all of the banks that have insurance with them.
Looking more and more that CM will take a $5B writedown. That figure is approximately the mark-to-market value off its $9.3B "hedged" portfolio.
The only reason CM hasn't taken such a charge is insurance. We know $2B is coming off the $3.5B insured by ACA. Although MBI and ABK are much stronger, it appears they won't survive. That said, you may still recover a few pennies on the dollar. So maybe a writedown will be $4B (somewhat better than mark-to-market). Then CM may raise only $1B? CM can handle up to $3B maximum before it really needs to shore-up its capital.