Player Avatar joker245 (94.45) Submitted: 8/5/2008 1:00:07 PM : Underperform Start Price: $2.08 ABKFQ.DL Score: +126.95

ABK and MBI are being carried by the Fed right now. As soon as inflation gets too big to ignore, short term interest rates will rise and defaults will rise with them as rates reset. The precurser to this is already occurring - auctions for auction-rate securities are being postponed right and left. What's more, Fitch recently announced that pretty much all muni issuers are getting a one or two step bump in their ratings (i.e. going forward, many more issuers will have AA or AAA ratings without the help of insurance). Which just illustrates the obvious: ABK and MBI, ultimately, offer a worthless product. It's window dressing. No future. Get out.

Aside from the above, there is a ton of paper out there insured by ABK that becomes callable if ABK's ratings drop. There has got to be a lot of political pressure on the ratings agencies right now to keep these insurers afloat. But what happens if defaults rise and they have to cover the losses with their undercapitalized balance sheet?

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Member Avatar DeerHunter73 (73.36) Submitted: 8/5/2008 1:37:22 PM
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Abk got a 250 mil contract with AirforceAbk paid off a 1.4 bil debt and walked away with 150 mil profit!Abk will have connee lee up soonMbi is paying interest only right now so i agree with you on mbi could be in trouble. Abk is working on fixing theres. I disagree with you on abk. as far as other companies having triple AAA ratings in bond ins berkshire i believe is the only one left as the rest have all be down graded. Abk should have theres back within the next 1/4. cant say that for mbi thou!

Member Avatar joker245 (94.45) Submitted: 8/6/2008 9:41:26 AM
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Read Fitch's press release dated 7/31/08 regarding recalibration of municipal ratings and another publication titled "Exposure Draft: Reassessment ofMunicipal Ratings Framework." Here's the bottom line: the number of muni issuers rated AA to AAA will go from 58%, now, to 86% - for GO bonds, whcih make up the bulk of the market.As others have pointed out regarding ABK, they're not all about insurance. However, they used to print money in that business and those days are over.Also, calling the $150 M from paying off the bonds "profit" is a joke, right? They paid them off at a discount because of the enourmous default risk they pose. If I held their debt right now, I'd get rid of it at a loss as well. Better a 10 point haircut now then 50 or more down the road.

Member Avatar DeerHunter73 (73.36) Submitted: 8/9/2008 9:41:35 PM
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Word that how ever you want to. bottom line is they PAID OFF THERE BOOKS 1.4 BIL IN DEBT. Thats all that matters to investors! DEbts been paid off and on the books and in the INVESTORS EYES the ones who hold millions of shares and who hold 10000 shares its bad debt paid and gone! Next story

Member Avatar DeerHunter73 (73.36) Submitted: 8/15/2008 10:09:42 AM
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Still think this way after all the news in the last month and in the last 24 hours?

Member Avatar DeerHunter73 (73.36) Submitted: 9/5/2008 11:56:57 AM
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Inside buying of 1,194,499 shares of common stock on 09/03/2008 at the price of 8.65 each. Total cost was $10,332,416.35 . Thats alot of money and shares for a company going out of business or back to 0. As alot of the caps players state.

Member Avatar joker245 (94.45) Submitted: 9/9/2008 2:35:19 PM
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Look, if they can secure an adequate capital base, then maybe they'll stay alive. My point is that right now the crisis in this market, and the larger market, has been putt off by government intervention (including the recent news out of Wisconsin). But you can't keep the wolves at bay forever. My prediction is that they will, I repeat WILL have to cover significant losses, eventually. Their price dropped, initially, based on EXPECTED defaults, and they've only had to cover a fraction of their exposure thus far. How you view the current valuation depends in large part upon what your crystal ball says. Mine says that default rates will go up, maybe hit double digits. If that happens within the next 12-18 months, this company is in Chapter 11. If the defaults never come (not happening) or come in smaller numbers (possible, I'm not psychic) then the current price is a fair value. But even in that rosiest of scenarios, there's still not much upside.

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