* Bond Insurers Bail-Out Around the Corner
So there it is, finally they’re attacking the heart of the problem in today’s credit crisis:
Jan. 23 (Bloomberg) — New York State’s insurance
regulators met today with U.S. banks to discuss raising new
capital for bond insurers, said a department spokesman.
Talks in New York with the unnamed banks are part of
Insurance Superintendent Eric Dinallo’s effort to stabilize the
bond guarantors and bolster the market’s financial condition,
said agency spokesman Andrew Mais in an interview.
New capital may help preserve the top credit ratings for
the bond guarantors such as MBIA Inc., the industry’s largest,
and halt any erosion of investor confidence in the $2 trillion
of assets they guarantee. Ambac Financial Group Inc., MBIA’s
biggest rival, lost its AAA grade from Fitch Ratings this month
on concern about rising defaults tied to subprime mortgages.
This should mean a big time rally for the financials and with that the broader market (assuming of course that these meetings don’t only talk the talk but also walk the walk). Happy days are here again, at least for now.