After being out of the newspaper headlines for a couple of years, Municipal Bond Insurance Company MBIA is back. Take a look at this report by Peter Lattman, "Insurer is Said to Forgo Bonuses Under Pressure" p. B5, col. 1 (New York Times Nat'l ed., "Business Day" Section, Tuesday, March 20, 2012). This print report was slightly rewritten and posted online in "Dealbook" Blog on the New York Times website.
Since dropping out of the headlines temporarily, MBIA has been a Plaintiff and a Defendant as a result of straying into fields full of Mortgage-Backed Securities. It has been sued by investment Banks alleging Fraud, and it has sued Bank of America and Countrywide Financial alleging Fraud. Id.
More important, MBIA was allowed by the then-Department of Insurance of the State of New York to split into two MBIA's if you will: a comparatively healthy MBIA, which contained its still profitable, and traditional, "municipal bond insurance business" and a very sick MBIA, with "crippling exposure to toxic mortgage-backed securities." Id.
Reportedly, the New York Department of Insurance (whose functions are performed in 2012 by the New York State Department of Financial Services) has done MBIA a more recent good turn. The Department successfully convinced the persons who operate MBIA not to give themselves "bonuses" under the circumstances.
Some people can learn to carry a tune, even if at first they seem to be tone deaf.
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