Bloomberg estimates that investors in bonds backed by now-worthless securities which were foolishly guaranteed by Municipal Bond Insurance Companies stand to lose $200 Billion or $200,000,000,000.00. People at the Bond Insurance Companies who decided to deal in subprime securities were experienced instead in issuing Insurance Policies for Municipal Bonds. Municipal, county and other local government bonds have not changed. Only the Bond Insurance Companies' credit ratings may change, because the one part of their business that they obviously did not know, which is the part involving subprime securities, has come up worthless. See several previous posts here, and see this summary by Aaron Kirchfeld & Andreas Scholz, "Ackermann Says Bond Insurers Threaten Debt 'Tsunami' (Update4)" (Bloomberg.com, Thurs., Feb. 7, 2008).
Josef Ackermann, the current CEO of Deutsche Bank Aktiengesellschaft, likened this potential loss of money to the "tsunami" that killed thousands of people in the Pacific. That seems like an inappropriate comparison at any time. Get a grip, Joe.
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