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Who could have guessed Buffet was going to be on cnbc this morning.

This is strictly a Warren Buffet Rally. :)
 
If we get stronger in the last hour, today may be the beginning of a multi-month rally. I don't think it's all short covering - fresh money is and has been buying in preparation for the second half.
 
The biggest problem with the credit markets right now is the CDO(made up of MORTGAGE BACKED SECURITIES)market. The key here is that CDOs are not covered. Why not? Well, because Buffet is not stupid. IMO, most of this rally was short covering. People can't be that dumb to be bidding this market up right now, or can they?:rolleyes:

Berkshire makes play for troubled firms' muni risk
Buffett says plan would make bond debt AAA again; CDOs aren't included

By Greg Morcroft, MarketWatch

Last update: 12:44 p.m. EST Feb. 12, 2008

NEW YORK (MarketWatch) -- Warren Buffett's Berkshire Hathaway on Tuesday came off the sidelines in the mortgage-market crisis, unveiling a plan to take on $800 billion of liability in municipal bonds currently insured by three troubled firms.

The undertaking would represent Buffett's biggest, and boldest, foray into the bond insurance business to date, and it stands to earn Berkshire Hathaway billions of dollars if successful.

Shares of some bond insurers initially gained ground on the news, lifting the broader market on hopes the plan will relieve one of the main pressure points in the current credit crisis. MBIA and Ambac shares, however, lost ground at last check, with MBIA down $1.61, or 12%, at $11.97 and Ambac off $1.38, or 13% , at $9.10.

In recent weeks, state insurance regulators in New York intensified talks with large financial firms in hopes of cobbling together a lifeline to assist the struggling bond-insurance industry. Berkshire Hathaway has begun to insure muni bonds in New York after getting a license quickly from the state

Insurance Department.
And in January, the National Association of Insurance Commissioners said that it's working with Berkshire to help it expand quickly and operate in multiple states.

Buffett, the chairman of Berkshire, said that last week his firm offered to take on $800 billion worth of municipal bond risks currently covered by three of the world's largest bond insurers.

Speaking on CNBC, Buffett said the firm made the offer to Ambac Financial and Financial Guaranty Insurance Co., which is partly owned by Blackstone Group.

Buffett said that under the proposal, Berkshire would assume the liability for the bonds in exchange for a payment from the current insurers of 1.5 times the premium they're currently receiving.

He said one firm has rejected the offer, and the other two have not yet responded.http://www.marketwatch.com/news/sto...x?guid={B2E0A5F5-B303-4ADE-A771-8C6158AB4C00}
Click to expand...
 
350zCommTech said:
The biggest problem with the credit markets right now is the CDO(made up of MORTGAGE BACKED SECURITIES)market. The key here is that CDOs are not covered. Why not? Well, because Buffet is not stupid. IMO, most of this rally was short covering. People can't be that dumb to be bidding this market up right now, or can they?:rolleyes:
Click to expand...
Sorry 350Z,when G will pay this week?Thurs or Friday? Thanks
 
350zCommTech said:
The biggest problem with the credit markets right now is the CDO(made up of MORTGAGE BACKED SECURITIES)market. The key here is that CDOs are not covered. Why not? Well, because Buffet is not stupid. IMO, most of this rally was short covering. People can't be that dumb to be bidding this market up right now, or can they?:rolleyes:
Click to expand...

Man, I can sure think of many rally's that did not make sense...so I guess anything is possible! I'm sure the smart money is good at manipulating the dumb money, which means getting them to jack up the prices.
 
The payout days are further apart because the payout rate per annum has dropped from 4.5% to 3.5% in the last few months.
 
Market Says: "Buffet cherry picked the good stuff!" :nuts: Now we're stuck with Aieee :sick: (sound of falling ABK MRI stocks).
 
I laugh any time I hear Warren Buffet. The guy is the definition of long term investing and unfortunately, 'long term' doesn't make the media money.

Warren Buffet is in the last hour of his shift. He's probably thinking, "Let the guy that relieves me deal with this mess. I'm just going to continue collecting my billions of dollars from dividend payouts in my Coca Cola stake until it's time to punch the clock."
 
Bullitt said:
I laugh any time I hear Warren Buffet. The guy is the definition of long term investing and unfortunately, 'long term' doesn't make the media money.

Warren Buffet is in the last hour of his shift. He's probably thinking, "Let the guy that relieves me deal with this mess. I'm just going to continue collecting my billions of dollars from dividend payouts in my Coca Cola stake until it's time to punch the clock."
Click to expand...
And to think he gave Bill Gates all that money.....hmmmm, didn't Bill open his mouth the day the last time the market jumped??? When was that, a week or so ago??? Market jumped big time because Bill was going to offer to buy who??? Yahoo......In effect nothing happened in the buy offer but a rejection, it just caused the market to jump....

I'm starting to watch for who is going to make an announcement to save us all and when ......
 
anidoc said:
350,
I remember you writing about waiting for the other shoe to drop awhile back. Here it is...I think. How will this affect the F fund..or will it?

100 Muni-Bond Auctions Fail Bennet Sedacca Today, 9:39 am
There were over 100 failed auctions in Auction Rate Securities yesterday, notably some in the closed end space. This is a first and it is important. Why? Imagine you had a margin account where you were forced to pay a higher margin rate and your bonds were falling in price? It is a lethal combination. If I could borrow these funds I would short them, but they are notoriously hard to borrow. The sad part is that these funds were more financial alchemy by the folks on Wall Street. There are approximately $265 billion outstanding. I know this: If I owned 'em, I would blow 'em out. If I could short 'em, I would, in size. This is a mess and mom-and-pop retail won't likely find out about it until it's too late.
Click to expand...

Well, if the smart money was controlling the market, this would be good for the F fund. Obviously, the dumb money is in control at the moment.

Those auctions were for the muni-bonds, suppose to be the good stuff. Those auctions failed because downgrades of ABK and MBIA could be coming any day now. Nobody wants to hold something that's about to get downgraded.
 
Great timing. They waited until after the bell.

S&P cuts $6.75 bln in CDOs backed by mortgages Wed Feb 13, 2008 4:47pm EST

NEW YORK, Feb 13 (Reuters) - Standard & Poor's on Wednesday cut ratings on $6.75 billion in collateralized debt obligations backed by residential mortgage-backed securities, following credit deterioration and downgrades of the mortgage securities underlying the deals.
The downgrades affect 66 tranches from 10 CDOs, S&P said in a statement. Including the new downgrades, S&P has cut its ratings on 1,567 tranches from 434 deals; an additional 2,305 pieces from 589 deals remain on review for downgrade.
The actions affect a total of $343.6 billion in debt, S&P said. For details see [nN13358218] (Reporting by Karen Brettell)http://www.reuters.com/article/bondsNews/idUSWNA098120080213
Click to expand...
Another one after the bell.

UDPATE 1-S&P cuts Radian debt ratings, may cut PMI
Wed Feb 13, 2008 4:29pm EST

NEW YORK, Feb 13 (Reuters) - Standard & Poor's on Wednesday cut its ratings on mortgage insurer Radian Group Inc (RDN.N: Quote, Profile, Research) and said it may cut PMI Group Inc (PMI.N: Quote, Profile, Research) and other insurers, after raising its expectations of losses from risky residential mortgage securities.

Triad Guaranty Inc's (TGIC.O: Quote, Profile, Research) ratings were also placed on review for downgrade, and the outlooks on Genworth Financial Inc (GNW.N: Quote, Profile, Research) and United Guaranty Corp were changed to negative, from stable, indicating a downgrade is more likely over the next two years.

United Guaranty is a subsidiary of American International Group Inc (AIG.N: Quote, Profile, Research).

Deterioration in the housing market and performance of all types of mortgages has caused Standard & Poor's to revise its expectations for all U.S. mortgage insurers' loss costs from mortgages originated in 2005, 2006, and 2007, S&P said in a statement.

"We also have concerns that the 2008 vintage could be unprofitable," the rating agency added.

S&P cut the insurance arms of Radian one notch to "AA-minus," the fourth highest investment grade, from "AA." The rating agency may cut PMI's insurance arm from "AA," the third highest investment-grade rating. (Reporting by Karen Brettell; Editing by Jonathan Oatis)http://www.reuters.com/article/bondsNews/idUSN1347276620080213
Click to expand...
 
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