tag:blogger.com,1999:blog-30643134.post6060300820086589724..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: And now young monoline... you will dieAccrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-30643134.post-16161830311304404022010-05-14T05:26:31.525-05:002010-05-14T05:26:31.525-05:00I would like to thank you for sharing your thought...I would like to thank you for sharing your thoughts and time into the stuff you post!! Thumbs up<br /><a href="http://www.injectionmolding-diecasting-china.com" rel="nofollow">die casting</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-15638791552826188022008-07-28T13:57:00.000-05:002008-07-28T13:57:00.000-05:00Dave:Its a shame... but most brokers are like that...Dave:<BR/><BR/>Its a shame... but most brokers are like that. Bonds don't get a lot of attention. P.S. That's why the muni insurance business thrived.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-44364879009027870082008-07-28T13:50:00.000-05:002008-07-28T13:50:00.000-05:00AI,I'm guessing that I should have been able to te...AI,<BR/><BR/>I'm guessing that I should have been able to tell that from the "PRF10" notation. Alas, I am still a lowly Padawan with much to learn.<BR/><BR/>And no, the broker didn't mention that. I've found that most of them don't really understand the bonds any better than I do and have to ask the bond desk for most questions.<BR/><BR/>Thanks for the reply. This site is helping me learn a lot.<BR/><BR/>Dave<BR/><BR/>P.S. I won't reraise the issue about US Treasury credit risk that was the subject of a post a few weeks ago. Did you hear that the Fed deficit for this FY was revised up by 20% today?Dave Wrighthttps://www.blogger.com/profile/09650953570038179309noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-46343747174741719192008-07-28T13:38:00.000-05:002008-07-28T13:38:00.000-05:00Dave:Did your broker tell you anything ELSE about ...Dave:<BR/><BR/>Did your broker tell you anything ELSE about that bond that might be pertinent? Like that its pre-refunded?<BR/><BR/>Your bond is backed by an escrow account funded by U.S. Treasuries. Zero credit risk no matter what.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-36393076119936034532008-07-28T13:20:00.000-05:002008-07-28T13:20:00.000-05:00What would you do?I've had an FSA insured muni...What would you do?<BR/><BR/>I've had an FSA insured muni from Pitt County, NC yielding 5.5% since the Fall of 2000. The CUSIP is 724500DU4 . I think it is a School Facilities bond.<BR/><BR/>After reading the post, I had my broker get the underlying rating. He told me this morning that it's:<BR/>Moody's: A1 <BR/>S&P: A+ <BR/><BR/>This is a strict income stream for me, so I'm not overly concerned it it were to drop a few percent in value as long as it keeps paying the coupon. <BR/><BR/>Should I be concerned about the underlying rating, or are these OK?<BR/><BR/>Thanks,<BR/>DaveDave Wrighthttps://www.blogger.com/profile/09650953570038179309noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-27087897461608241282008-07-28T08:43:00.000-05:002008-07-28T08:43:00.000-05:00Tony:No I said that FSA and AGO insured the majori...Tony:<BR/><BR/>No I said that FSA and AGO insured the majority of bonds that did come with insurance. In fact, it was probably like 95% starting in February or so.<BR/><BR/>I don't have the stats on the 2Q vs 1Q handy, but its definately falling. And now <I>nothing</I> is coming insured.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-9812337305188503672008-07-26T15:36:00.000-05:002008-07-26T15:36:00.000-05:00You said that the majority of bond offerings were ...You said that the majority of bond offerings were insured this year. Have you been able to determine if there was a decline in the second quarter. What was the percent of the bond offerings that were wrapped in the first quarter versus the second quarter?Tony Towershttps://www.blogger.com/profile/06557074208330101375noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-50963794870609185232008-07-25T14:53:00.000-05:002008-07-25T14:53:00.000-05:00I'm glad, Jenny and Shawn, I'm not the only one to...I'm glad, Jenny and Shawn, I'm not the only one to notice the BH/Moody's connection. Buffett's position as the kind of patron saint of American capitalism, despite the untold messes his insurance businesses seem to tread in, is a mystery to me.Gringcorphttps://www.blogger.com/profile/09254777209701028458noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-29330404967872374732008-07-25T09:30:00.000-05:002008-07-25T09:30:00.000-05:00RBN: I basically agree. But if you live in a mark ...RBN: I basically agree. But if you live in a mark to market world, like I do, you have to be thinking about what bonds are likely to perform better than others. I'd rather own a university or sewer system than a school district right now. I mean, I'm not scrambling to sell my school districts, but I'm cautious on them.<BR/><BR/>Jenny & Shawn: Again, I mostly agree with you that AGO should be able to perform on all their obligations. But my opinion doesn't matter. Neither does yours.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-76645503080573292932008-07-25T05:52:00.000-05:002008-07-25T05:52:00.000-05:00Local governments (mostly public schools) in Illin...Local governments (mostly public schools) in Illinois that rely on property taxes levy an amount of total dollars. This won't change with falling property values. There will be political pressure to curb spending, but defaults on existing bonds would seem posible only in a total economic collapse.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-26950234300667846232008-07-24T21:33:00.000-05:002008-07-24T21:33:00.000-05:00TDG, you're overreacting. Moody's has lost all cre...TDG, you're overreacting. Moody's has lost all credibility already and is just running scared, trying to show they were "being fair and thorough" on all monolines as they brace for lawsuits from all quarters.<BR/><BR/>Read their press release. As you note, AGO is still over $100 million ABOVE the threshold of 1.3x losses in a "stress" scenario that Moody's has been using. So what's the catalyst for the negative watch?<BR/><BR/>This is just Moody's moving the goalposts on Aaa criteria without notifying the company. No insurance company has ever (as far as I know) or should ever have its credit quality judged on its ability to write new business. Why should we care if Allstate writes a single new policy? Their underwriting, loss reserves and investment portfolio quality should be the key metrics. Wouldn't an insurance company that *had to* write new business to maintain its credit quality be called a Ponzi scheme?<BR/><BR/>Furthermore, if an overall decline in muni insurance in general is a negative, then why does BHAC debut with a Aaa, as an entrant into a declining market? This is like Moody's assigning a Aaa rating to a buggy-whip maker who enters the industry in 1920, just because they have no history in it. (Heck, with this criteria, let's start the Accrued Interest Assurance Company -- since we have no legacy business and no portfolio to "stress test," we can debut at Aaa, too!)<BR/><BR/>Or if the ability to write new business was so important, then why weren't the bigger writers like MBIA and Ambac awarded quadruple-A ratings since they had more new issuance and greater market share?<BR/><BR/>Is it any wonder that Berkshire owns a big stake in Moody's? <BR/><BR/>What a joke.<BR/><BR/>Disclosure: long FSA and AGO insured muni bonds, all with investment grade underlying ratings independent of insuranceJenny and Shawnhttps://www.blogger.com/profile/13600953771497524166noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-86267889216430017422008-07-24T21:09:00.000-05:002008-07-24T21:09:00.000-05:00the best part of this post was the title.the best part of this post was the title.GS751https://www.blogger.com/profile/12104712741442133837noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-11011643652296881932008-07-24T10:47:00.000-05:002008-07-24T10:47:00.000-05:00PNL: Working on a piece about property tax collect...PNL: Working on a piece about property tax collections. I'm not real worried about states, but if it weren't for this Gloabl Scale BS, I'd expect more downgrades than upgrades certainly. Generally speaking, states have a whole bunch of revenue sources, and they've dealt with decreases in sales taxes or income taxes many times in the past.<BR/><BR/>But falling property taxes has been much more rare. So I'm most worried about local governments. I'm specifically using LA as a test case. <BR/><BR/>As we speak, every deal that was going to come with FSA is coming uninsured.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-71816480761397028152008-07-24T10:41:00.000-05:002008-07-24T10:41:00.000-05:00Nice headline. I was't that sure that Berkshire's ...Nice headline. I was't that sure that Berkshire's monoline was going to grab market share, since it didn't seem to be hiring many people. But BH has an advantage, in that the agencies will be warier about downgrading its monoline, in my cynical opinion.<BR/><BR/>Your next post could be titled "Help Me Obi Warren Buffett Kenobi, you're my only hope."Gringcorphttps://www.blogger.com/profile/09254777209701028458noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-24531385300138463952008-07-24T10:06:00.000-05:002008-07-24T10:06:00.000-05:00I expect FSA to soon draw on its line of credit wi...I expect FSA to soon draw on its line of credit with Dexia. FSA is Dexia's most important line of business. They will draw, in my opinion, at least $500 million, far more than incremental excess capital reserve requirements under a stress scenario.Tony Towershttps://www.blogger.com/profile/06557074208330101375noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-84215650297761291172008-07-24T09:57:00.000-05:002008-07-24T09:57:00.000-05:00Not precisely on topic, but I heard something inte...Not precisely on topic, but I heard something interesting this morning. Collective state budget deficits have tripled this year to $60bn. What could that mean for underlying ratings? Could this potentially offset some of the upgrades resulting from the change in methodolody for muni credits?PNL4LYFEhttps://www.blogger.com/profile/10009165302340487456noreply@blogger.com