Credit

The Prince’s Monoline Roundup

By The Prince ⋅ February 22, 2008 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

The Prince has come to the conclusion that the financial blogosphere is doing a much better job covering the monoline (i.e. bond insurers) debacle than the traditional financial press.  There has been a plethora of interesting analysis and thought provoking work done on the recent trauma involving bond insurers by bloggers. 

The Prince has contributed his own commentary on the bond insurers here.  However, this information and analysis is outdated now that many of the monolines are considering and some have proposed splitting into separate entities.  The Prince’s analysis pales in comparison to some of the work done by his fellow financial bloggers.  Here is a brief sampling of some of this work with comments from The Prince.

1) This post by Information Arbitrage gets to the heart of the problem with separating the insurers into two companies i.e. one company to insure toxic debt like CDOs and one to insure safer municipal/government debt.

Bond Insurer Break-up vs. Super SIV - Beware Unintended Consequences

2) There is a ton of great material on Alea blog.  Here is a sampling even though some of it is a little bit dated:

MBIA vs. Ackman

AMBAC CDS update

Monolines: CDS Improving

ACA: CNBC Commentary Factually Incorrect - Here Alea highlights just one instance of the traditional financial media being dead wrong about the insurers.

3) Perhaps the best analysis out there comes form Naked Capitalism who has been doing some great work on the monolines.  His analysis and depth of coverage is truly inspiring.  One day he put up 4 posts in one day on monolines.

Monoline Capital Finesse

Monoline Death Watch: Is There Really a Plan Here?

Calculating Damage of Monoline Meltdown - This is a great article assessing how much pain will be caused by the monolines getting downgraded or going under.

Fresh Credit Market Turmoil

Ackman Proposes Breakup Plan

The bond insurance debacle is just the latest iteration of the credit crisis that began this summer.  The knock-on effects of mortgage paper and the CDOs which depended on it for valuations being so grossly overvalued has had far reaching effects on all aspects of the U.S. economy.  There may even be more unintended consequences on the horizon because of the credit crisis.  For example, we are already seeing banks pull back from lending money to corporation.  We have also seen that it is much more difficult to raise money for companies with junk or questionable credit.  All these factors contributed to the recession the U.S. finds itself in now and serve to worsen the crisis.  It is worth reading the links above and staying appraised of the situation as it continues to develop at the monolines.