Wednesday, February 25, 2009

Ambac Loses Another $2 Billion

Remember when everyone was panicked about the bond insurers going out of business?  How that was going to tank our economy?  Seems so long ago.  After so many bank failures and bailouts, the bond insurers are now contented to muddle around in obscurity as $1 and $4 stocks.  Of course, this hasn't stopped them from living out their destiny of bleeding cash as far as the eye can see.  Ambac just posted a $2.3 billion quarterly loss, which is positively bullish compared to the prior-year net loss of $3.27 billion.  The results include $594 million in realized and unrealized derivatives losses and $916 million in financial-guarantee losses largely related to second-lien and other residential MBS.  Revenue was negative $202 million compared to negative $4.79 billion, which admittedly is an enormous improvement.  However, shareholder's equity is now a negative $3.8 billion.  If you'd like to travel back in the Mock the Market time machine for a good laugh, check out my April 23, 2008 post entitled "Ambac CEO Claims "Worst May Be Behind Us."  Actually, you don't even have to read the post, the title says it all.       


spagetti said...

yeah well.. the worst was behind him..
and was chasing him with a chainsaw

Reggie said...

I blame all the short sellers.

K10 said...

The good news is that Bernanke thinks they should reinstate the uptick rule. I'm sure that historians will eventually conclude that it was the repeal of the uptick rule that caused the Great Recession/Depression of 2008-2010.