Oh yeah, and I'm really sure that all those state insurance regulators are all staffed up sufficiently to become receivers or conservators for all these failing guarantors. Just like the federal regulators are. Crikey.
That means, it's probably over for ACA. The protection of state insurance regulators is a bureaucratic black hole. It took Baldin United four years to work through state insurance protection in the 1980s. Equity holders get wiped out. Policy holders get pennies on the dollar, years from now.
As Mark Twain said, history doesn't repeat itself, it rhymes. And 2007's Maryland Insurance Administration rhymes nicely with 1985's Maryland Savings-Share Insurance Corp. Don't worry Tanta, MD has experience bailing out the mortgage industry.
Well I was trying to be all ironical, but light irony is difficult to spot on the internet. Of course I didn't have any deposits in any Maryland charterd thrifts, so I received no direct benefit from the bailout, while my taxes paid back the bonds that eventually paid off depoisters.
Honestly, if I had to guess, I'd suspect that MD (and most states) are probably better at dealing with failing banks or thrifts than failing insurers. On the theory that insofar as we ever do prepare for the worst, we prepare for what got us last time (thrifts failing, not monoline bond insurers).
My state has some experience dealing w/ life/health/casualty insurers going under. My impression is that they do not normally fail because all their insureds die at once, but because of bad investments or theft or something along those lines. I think this case is rather different.
The article isn't clear about what ACA gets in return for this bankruptcy-in-all-but-name. Was the sheriff at the door with a court order this morning?
I don't know about the sheriff or the court order, but I suspect the directors and officers of ACA may not want to continue making decisions, e.g., which claim to pay, when the company is or may be insolvent. Which claims and which creditors do you pay? In such circumstances, the specter of personal liability can be very frightening.
Jackk, I believe monoline means they only deal with one form of insurance, specifically bond insurance, instead of multiple forms (lines) that a conventional insurer would (auto, home, etc.). In other words, its the insurance equivalent of a focused single industry hedge fund versus a bank.
Do you think there is a connection between January dates below:
As of September 30, 2007, the total Structured Credit notional portfolio was $69.1 billion and the amount that would have been required to post under the contingent collateral arrangements in the event of a corporate credit event was at least $1.7 billion.
Under the agreement, the counterparties have waived all collateral posting requirements and termination rights relating to the rating of ACA FG under their respective transaction documents including any credit support annexes and similar agreements. The forbearance will remain in effect until January 18, 2008. As such, ACA FG is not required to post collateral as a result of S&Ps actions during the forbearance period.
Re: The three-month London interbank offered rate for dollars, or Libor, dropped 3 basis points to 4.89 percent yesterday. The rate is still 64 basis points above the Fed's lending target. From 1998 to August of this year, the median gap was 19 basis points.
The Fed announced the special auctions on Dec. 12, after rate cuts failed to spur bank lending amid mounting losses on subprime-mortgage securities. The program originally consisted of four special auctions concluding on Jan. 18. Central banks also auctioned $34 billion on Dec. 19.
I have no idea. What's the date of the forbearance agreement?
If, say, the agreement was dated Dec. 19, and the contract specified that forbearance could be given for up to 30 days, I'd think that January 18 was probably the only date they could come up with.
Oh yeah, and I'm really sure that all those state insurance regulators are all staffed up sufficiently to become receivers or conservators for all these failing guarantors. Just like the federal regulators are. Crikey.
The state will be ripe for playing by the players.
All the bonds that they insured have now been downgraded to what they would be normally, right?
That means, it's probably over for ACA. The protection of state insurance regulators is a bureaucratic black hole. It took Baldin United four years to work through state insurance protection in the 1980s. Equity holders get wiped out. Policy holders get pennies on the dollar, years from now.
Benazir Bhutto assasinated.
Chaos coming to a destabilized Islamic nuclear power.
As Mark Twain said, history doesn't repeat itself, it rhymes. And 2007's Maryland Insurance Administration rhymes nicely with 1985's Maryland Savings-Share Insurance Corp. Don't worry Tanta, MD has experience bailing out the mortgage industry.
Don't worry Tanta, MD has experience bailing out the mortgage industry.
That is precisely what worries me.
That last one went so well.
Well I was trying to be all ironical, but light irony is difficult to spot on the internet. Of course I didn't have any deposits in any Maryland charterd thrifts, so I received no direct benefit from the bailout, while my taxes paid back the bonds that eventually paid off depoisters.
sorry, though I closed the bold.
Well I was trying to be all ironical
I know, I was trying to be ironical back.
Honestly, if I had to guess, I'd suspect that MD (and most states) are probably better at dealing with failing banks or thrifts than failing insurers. On the theory that insofar as we ever do prepare for the worst, we prepare for what got us last time (thrifts failing, not monoline bond insurers).
Buckle up yer seatbelts. Pakistan is about to become interesting, in a potentially very bad way.
Calculated risk, meet unquantifiable uncertainty.
Kinda late to hand the keys to a DD after you done wrecked the car....eh?
Honestly, if I had to guess, I'd suspect that MD (and most states) are probably better at dealing with failing banks or thrifts than failing insurers.
I think we just need more state sponsored casinos - that will take care of the problem. That and more lotteries.
what does "monoline" in this context mean?
My state has some experience dealing w/ life/health/casualty insurers going under. My impression is that they do not normally fail because all their insureds die at once, but because of bad investments or theft or something along those lines. I think this case is rather different.
The article isn't clear about what ACA gets in return for this bankruptcy-in-all-but-name. Was the sheriff at the door with a court order this morning?
what does "monoline" in this context mean?
I like to think of it as correlation equal to 1.0.
Fair Economist,
I don't know about the sheriff or the court order, but I suspect the directors and officers of ACA may not want to continue making decisions, e.g., which claim to pay, when the company is or may be insolvent. Which claims and which creditors do you pay? In such circumstances, the specter of personal liability can be very frightening.
Monoline insurance, at wikipedia.
Monoline insurance - Wikipedia, the free encyclopedia
Jackk, I believe monoline means they only deal with one form of insurance, specifically bond insurance, instead of multiple forms (lines) that a conventional insurer would (auto, home, etc.). In other words, its the insurance equivalent of a focused single industry hedge fund versus a bank.
Monoline insurance - Wikipedia, the free encyclopedia
what does "monoline" in this context mean?
The eyebrows of the guys running them?
Tanta, Tanta,
Do you think there is a connection between January dates below:
As of September 30, 2007, the total Structured Credit notional portfolio was $69.1 billion and the amount that would have been required to post under the contingent collateral arrangements in the event of a corporate credit event was at least $1.7 billion.
Under the agreement, the counterparties have waived all collateral posting requirements and termination rights relating to the rating of ACA FG under their respective transaction documents including any credit support annexes and similar agreements. The forbearance will remain in effect until January 18, 2008. As such, ACA FG is not required to post collateral as a result of S&Ps actions during the forbearance period.
Re: The three-month London interbank offered rate for dollars, or Libor, dropped 3 basis points to 4.89 percent yesterday. The rate is still 64 basis points above the Fed's lending target. From 1998 to August of this year, the median gap was 19 basis points.
The Fed announced the special auctions on Dec. 12, after rate cuts failed to spur bank lending amid mounting losses on subprime-mortgage securities. The program originally consisted of four special auctions concluding on Jan. 18. Central banks also auctioned $34 billion on Dec. 19.
January 18th? Whats up with that??
"January 18th? Whats up with that??"
It's a Friday? Just guessing.
The forbearance will remain in effect until January 18, 2008. As such, ACA FG is not required to post collateral
Fed announced the special auctions consisted of four special auctions concluding on Jan. 18
January 18th? Whats up with that??
I have no idea. What's the date of the forbearance agreement?
If, say, the agreement was dated Dec. 19, and the contract specified that forbearance could be given for up to 30 days, I'd think that January 18 was probably the only date they could come up with.