Banking, finance, and taxes
MBIA (MBI) and Ambac (ABK) May Lose Inflated Credit Ratings
Published:
Anyone who does not think that insurance regulators have done what they can to keep credit ratings high at Ambac (ABK) and MBIA (MBI) is a chump. With their tremendous losses and risk in their portfolios going forward, only a fool would rate them "Aaa"
The game could only last so long. According to Bloomberg. “meaningfully” higher losses on home-equity loans and collateralized debt obligations than anticipated, raising concern about their Aaa status, Moody’s Investors Service said.
So, why have the ratings agencies held back? To help protect against another huge round of write-downs at big banks. The news service adds "Banks also faced losses of $70 billion on the asset-backed debt, according to Oppenheimer & Co. analysts."
That means that downgrades to the muni-bond insurance companies could lead to the need for banks to raise more capital. That, in turn, will hammer shareholders in the institutions.
Douglas A. McIntyre
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.