MBIA Posts Biggest Loss, Considers New Capital Plans

From Bloomberg:

"Jan. 31 (Bloomberg) -- MBIA Inc., the world's largest bond insurer, posted its biggest-ever quarterly loss and said it is considering new ways to raise capital after a slump in the value of subprime-mortgage securities the company guaranteed.

The fourth-quarter net loss was $2.3 billion, or $18.61 a share, raising concern the Armonk, New York-based company will lose its top credit ratings. The loss came a day after FGIC Corp.'s insurance unit became the third company to be stripped of its AAA grade."

Wall St off high on CNBC bond insurer report

So Charles Gasparino ruined the party! Just when the market got another rate cut, and was up 100 points, he had to bring up something that was known yesterday:

"NEW YORK, Jan 30 (Reuters) - U.S. stocks pared gains in late trading on Wednesday after CNBC reporter Charles Gasparino said he believed that ratings agencies may downgrade bond insurers MBIA and AMBAC Financial Group Inc. as early as today."

Face it - these bond insurers are bankrupt. The paper is worthless - the model was bullshit. This is a trillion dollars worth of stuff here we are talking about. The bulls tried today, but this news wasn't the reason the market sold off late, it was just an excuse.

Update: Calculated Risk has more.