Thursday, January 24, 2008

Super Shitpile Revisited

I doubt this will work, but whatever.

an. 24 (Bloomberg) -- New York regulators are pushing the biggest U.S. financial institutions to rescue bond insurers, led by MBIA Inc. and Ambac Financial Group Inc., and avert credit- rating downgrades that may further disrupt financial markets.

Insurance Superintendent Eric Dinallo, who met with industry executives yesterday, is trying to bolster the bond insurers' ratings with help from banks and securities firms that posted $133 billion of writedowns and credit losses tied to mortgage securities. He's received encouragement from Federal Reserve Bank of New York President Timothy Geithner, said a person with knowledge of the matter.

The insurers may get fresh capital of as much as $15 billion, the Financial Times said on its Web site yesterday. The figure may be smaller, said a person familiar with the talks. The infusion would help stave off credit rating downgrades of MBIA and Ambac, the industry's two largest companies, and the $2.4 trillion of debt they guarantee. Banks would avoid billions more in writedowns on the value of subprime securities they had insured.

The whole system's been corrupt for a long time, courtesy of the ratings agencies and the Masters of the Universe in Wall Street.