The hearings on the bond insurers is ongoing. Gov. Spitzer is hoping to avoid downgrades of the bond insurers by recapitalizing them, perhaps in a couple of days. I could have sworn the rating agencies said raising capital wouldn’t matter. Oh, well. NY Insurance Commission Dinallo says the state has the legal ability to place bond insurers into ‘rehab’, which is a form of bankruptcy. Listening to the CEO’s of Ambac and MBIA, they say they are well capitalized and will have no problems paying claims. So what’s the big deal with these hearings and talks of bail-outs? Somebody needs to get these guys the same playbook!
FGIC’s Senior debt has been cut to junk by Moody’s, and a cut to their financial strength from AAA to A3.
The Dow closed at 12376, close to support of 12350. The Nasdaq lost 41 points to close at 2332 and the S&P closed at 1348. Talk about lack of conviction in this market. Bids keep drying up along with volume. More later!
