MBIA rally continues as CEO Brown testifies against RMBS sponsors

By Dan Alderson

The rally in MBIA Inc credit default swaps has continued apace today, with the insurer’s chief executive Joseph “Jay” Brown testifying for the New York State Assembly Standing Committee on Insurance

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Comment by: Anonymous. Posted 6 years ago [2011-02-16 23:32:32]

Looks like a case in which all parties are in glass houses. The MBIA / NYSID attempt to de-capitalize its structured finance policies will likely fail. Brown's attempt to paint prime loans as worse than subprime must be wrong. Most likely he uses "prime" to mean "alt-A" and compares alt-A CDO losses to subprime RMBS - not a valid comparison. Having said that, the charge that some RMBS sponsors violated reps and warranties with loans going into pools may prove true. Look at the recoveries Fannie and Freddie have gotten from BofA.

Comment by: Mike Peterson. Posted 6 years ago [2011-02-16 21:52:33]

Sullivan & Cromwell partner Robert Giuffra, who represents the 12 banks that are suing MBIA, has responded to the points made by Jay Brown in his testimony. He accuses MBIA Inc of stripping $5 billion in assets from MBIA Insurance. "We're confident that the courts will undo MBIA's so-called 'transformation' and rule that the New York State Insurance Department never should have approached these illegal transactions," he said in a written statement.

Comment by: Anonymous. Posted 6 years ago [2011-02-16 21:42:34]

Seems like a lot of convincing arguments