RE: Crash of 1929 + around the corner?My key thought is that this is a market where it is more important to minimize the prospects for losses than being worried about missing an opportunity to buy stock.
So although CM is absolutely cheap at $70 it could possible, and likely, go lower in the very near-term. Still believe the bottom will settle between $60-$65.
The Buffett entry will only accelerate the demise of MBI and ABK. Fitch already warned both insurers that unless they each came up with an additional $1B in new equity they will be downgraded.
In MBI's case the $1B is in addition to that already agreed by Warburg. The catch here is that Warburg hasn't yet finalized its deal. They will try to walk away arguing "material change". with the stock down 50%, a Fitch warning and now Buffett, MBI likely to be downgraded by two notches and not one. Once only A it will no longer be able to issue much new business. It will be the beginning of the end.
This collapse will happen very rapidly. As a result it will precipitate CM taking not a $2B writedown (for insolvent ACA), but likely another $2.5-$3.0B for other insurers like ABK and MBI.
CM will also need to raise $1.5-$2.0B in new equity for this writedown.
Under such a situation it will go lower shor-term, especially since it needs to raise the equity. At that time it will be time to BUY.