Ambac Financial Group, Inc. (ABK)

gparent2008 (99.39) Submitted: 11/19/07 5:07 PM

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some "for real life" questions 1. insolvency? 2. how bout mbia (mbi) 3.mortgage insurer (mtg)

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gparent2008 (99.39) Submitted: 11/19/07 5:07 PM

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thanks

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TMFWBuffettJr (99.34) Submitted: 12/18/07 3:46 PM

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Yeah, insolvency is coming, and good point asking about MBIA and MTG -- I shorted both of those as well. MBIA I've shorted heavily in my real portfolio via puts. I will likely make a fortune on this disaster -- IF the company goes bankrupt, which I believe it will.

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Lorensan (< 20) Submitted: 1/22/08 10:27 AM

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We have seen to bottom if not close to it. People act like even when there are some defaults that these companies are worth nothing....The blow off is here and the time to buy them if you are a long term player is right now.
Well over 90% of people are making their payments and so I ask you this if you are short. What percentage of these loans are worth zero? even the bad ones have value, is it 50 cents on the dollar or 80 cents?

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TMFWBuffettJr (99.34) Submitted: 2/11/08 12:13 PM

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Lorensan,

It is not about the money coming into Ambac, it is about the money going out. Ambac doesn't just own a bunch of home loans. That's not its business. It is going to have to pay insurance out on loans and bonds that have failed. It insured way, way more than what it has to pay out, which is nothing new, but new revenue will be shut off completely as people stop insuring with an insurer on the precipice. This is not a company that collects payments from home loans. That is not what will kill it, but rest assured, it will die.

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staffier (21.02) Submitted: 8/16/08 12:49 PM

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Are you still standing by your claim that Ambac (and presumably MBIA) are insolvent and heading towards grim death? Both Moody's & S&P maintain that Ambac & MBIA are adequately capitalized. In fact, I believe both companies exceed the ratings agencies' capital requirements for a AAA rating, and these capital ratios are now on the rise.

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TMFWBuffettJr (99.34) Submitted: 9/17/08 6:25 PM

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Yes, I still stand by my "claim." You really want to pretend like anyone should give a damn about what Moodys or S&P think about a company's liabilities right now? They only downgrade companies after they collapse. Haven't you been watching? Companies remain AAA until they can't even make payroll and then they finally get downgraded...to AA. The ratings agencies are the biggest joke on Wall Street right now.

You can follow me around on CAPS all you'd like talking about my "terrible analysis" and "claims" and "disingenuous analysis." I just hope for your own sake your real-money portfolio doesn't reflect your CAPS one. Let's come back on Jan 1, 2008 and continue this discussion.

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staffier (21.02) Submitted: 9/19/08 4:01 PM

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Fair enough, regarding the ratings agencies. However, New York insurance commissioner Eric Dinallo agrees: MBIA & Ambac are NOT insolvent. Does that count for something??

I haven't been following you around. I've simply noticed how awful the supposed All Stars on CAPS are at recognizing deep value. How else would you explain companies like Ambac and MBIA having 1-star ratings when they're both ~300% above their bottoms in mid-July?? (Ditto for PMI, RDN, FHN, ZION, etc etc etc) I'm guessing most of these folks will change their tunes once the financials have gained back most of their losses, but what good is that? -- they'll miss out on all the fun.

For the record, I bought in to Ambac at $2.50, $1.50, and $4.50, and MBIA at $4.75, starting in early July (2008). The two holdings combined represent roughly half of my Roth IRA. On Jan 1, 2009 (I'm assuming 2009 is what you meant above) you can laugh at my losses if any exist -- I just don't see that happening.

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staffier (21.02) Submitted: 9/22/08 5:23 PM

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TMF -- Just to let you know, I liquidated 3/4 of my ABK holdings @ ~$3.50 today (yes, for a profit...but not nearly as much as I had hoped to make). Moody's downgrade threat (and likely follow-up on their words) could easily cause a liquidity crisis, IMO. I stand by my earlier assessment -- Ambac is not insolvent -- but I'm not willing to gamble too much on this one, as I can see something similar to AIG's fate playing out here. I rolled my proceeds into MBIA @ ~$12.50.

Just a friendly disclosure...

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TMFWBuffettJr (99.34) Submitted: 9/23/08 9:25 AM

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Okay, thanks for your responses. However, I'm afraid you've made a terrible mistake rolling your money into MBIA at $12.50, but you already knew I'd say that. I have to stress again that the company is worth $0 unless there is an enormous government bailout which specifically targets MBIA and ABK. I'm afraid you will lose your money. Eric Dinallo has been gravely wrong on everything he's said since late 2007. On the other hand, I shorted this company in June of 2007. So I remain confident in my analysis and don't worry about Dinallo's opinion in the slightest. You have to consider this from my perspective, Staffier. People have been telling me I'm wrong on the boards for almost two years now -- since $80. So the fact that it is a new face now at $4 doesn't faze me in the least. In March I sat there in Omaha as Buffett explained how he was being paid more money than the reinsurers to reinsure the reinsurers. This is Alice in Wonderland. I can't explain to you why MBIA went up from $4 to $16. It made no sense to me, and I'm just sitting here waiting for the stock to drop back down to $4, which I know it will.

If all of the all stars disagree with you, I suppose it could be that all of us don't understand deep value. But there is a second possibility...

WBJ
P.S. I wish you the best of luck with your real money, but I fear the worst.

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