amk and mbi bail out?

[jas1n]

http://news.yahoo.com/s/ap/20080212/ap_on_bi_ge/buffett_muni_bonds

good news for the stocks. Wander what kind of impac it will have.

[wallstreetsedge]

i wonder what these companies have under their sleeves to reject his offer

[aiki14]

i wonder what these companies have under their sleeves to reject his offer

They had to reject it because it would kill them if they took it. It only covers the Muni portion of their portfolio's. Essentially the part of their stuff that generates some cash these days. They would be left with the CMO, CDO stuff which is where the deepest problems lie. That's why they refused and why the price of MBI et al have gone precipitously down the last two days.
I saw 20 references to the allegation the markets were up on Buffet's plan, but if you understand the plan you aren't bullish on the monolines or the market. I think you can still be short these guys going into tomorrow although I haven't held my positions overnight yesterday or today.

[concrete]

If pressed to provide a party to blame, try blaming the volume builders. In residential real estate, they are at the top of the food chain. EVERYONE wants what they have. From the lowly plumber to the title insurers to the sellers of MBS portfolios. The volume homebuilder makes lots of demands, and you either deliver what they ask for, or get shut out. Builders began to realize that if they could deliver any warm body to the table, they could pressure the underwriters and their bosses into cramming that loan through the system. If you ever talk to anyone associated with the inner workings of the volume builder, they will tell you the pressure to approve substandard loans was to the level of "approve the loan or find a new job".

Wall Street complied and are culpable as well. But if you want to lay some blame, the volume homebuilder is the guy that was leading this charge.

Every volume homebuilder owns their own mortgage brokerage / banking shop. DR Horton owns DRH Mortgage, Centex owns CTX etc. It is the fox guarding the hen house. The slums of tomorrow will be in the neighborhoods where the volume builders produced cheaply built, indistinguishable units and advertised them at $500 to move in. Buyers are not allowed to use a different mortgage company lest they lose thousands of dollars in "incentives". In some instances 30-40% of those homes were funded with sub-prime loans. Dont get me wrong, there is a load of blame to be shouldered by the industry as a whole, but the volume home builder was the "pusher on the playground". They are getting punished through their stock price, but I rarely hear them portrayed as much more than a victim when in fact they are more on the front lines than anyone. They are also masters at throwing their considerable weight around.