In a feature today on the monoline insurance companies being “the next financial crisis” ABC News breaks down the current crisis hitting the monoline insurance industry. Complete with a section on “What is Bond Insurance” the piece actually does a good job laying out the issues and actors in a clear way.
Oh boy, you know the poop has hit the fan when the ole gipper steps in to save a company. Love it. Joseph Brown storms in to monoline insurer MBIA (NYSE: MBI) stating confidently that he sees no long term risk to the use of bond insurance, though the industry faces troubled waters ahead. He also denied reports that he would be splitting the company into two parts by siphoning off the municipal bonds end to maintain its AAA-rating.
Brown was asked by the board to step in for Gary Dunton who resigned recently.
Australia and New Zealand Banking Group Ltd (ANZ), Australia’s 3rd largest lender, noted it may see a $200 million write down thanks to its interest in a US bond insurer. The bank shares are seeing a significant decline currently, faltering nearly 6 percent. ANZs announcement further delineates the ripple effects of bond insurer uncertainty across the globe, not just in the United States and not just in municipal bonds.
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