Wall Street Folly

It's Official: We've moved! Our new home is www.wallstreetfolly.com

Please join us over at our new Wall Street Folly site.  We're still working out some kinks, but it's up and running! (Note, if for some reason you're not directed to that site, keep trying.  It gonna take a bit for the redirection of our wallstreetfolly.com url to be propogated through the system.)

FGIC reqesting to split in two

Fresh off of it's Moody's downgrade yesterday, FGIC is requesting that it split its businesses into two companies, one retaining munis, and the other getting left with the crap.  As the news broke, Eric Dinallo, NY's insurance commissioner was appearing on CNBC.  He confirmed FGIC's request, and noted that it's not a done deal, that a cash injection bailout was still possible...

Financial Guaranty Insurance Co., a major bond insurer, has notified the New York State Insurance Department that it will request to be split into two companies, according to a person familiar with the matter.

One of the firms would likely retain much of the business of insuring structured finance bonds such as those backed by mortgages, which have come under severe pressure due to the housing market slowdown, according to the person.

The other company would likely retain most of the municipal bond insurance business, which is stronger, the person said.

FGIC Will Request Break-Up - Wall Street Journal

John Thain on the bond insurer rescue plan and on Merrill's future in structured finance / cdo's

Merrill Lynch CEO John Thain expressed doubt that the industry-wide bail-out plan for the credit insurers would ever get off the ground but that infusions into individual companies would be more likely.

In other Merrill news, the firm is cutting back on structured finance and CDO's.....

Wilbur Ross gonna buy Ambac?

Wilbur Ross is said to be in takeover talks with Ambac according to The Evening Standard....

We thank the volatility gods for such an awesome day

What an awesome day.  Anyone who reads us knows that we LOVE volatility,  We were completely exhausted by the time the market closed, but elated that it was one of our busiest and most profitable days ever.  So we have to profusely thank the volatility gods, and also the New York insurance regulators and banks who got together to chat about maybe working out some kind of bailout of the bond insurers.  That's broadly credited for turning the market around this morning and fueling today's big rally.  We're pretty skeptical that anything gets done since the banks aren't exactly flush with bailout cash, but hell, anything that contributes to volatility is fine by us.

Bond insurers: Short sellers continue to party as Moody's & S&P start new (belated) reviews and MBIA Surplus Notes plunge

If you're long these pigs, OUCH....