Comments on: Split the Financial Guarantors in Two? You Can’t Do That. http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Mon, 13 Feb 2012 16:41:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: jean leasyhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-21147 jean leasy Thu, 12 Mar 2009 14:37:19 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-21147 so what if regulators "allowed" this nonstandard business. our toothless regulators allowed all sorts of opaque investing vehicles to be sold in public markets. the rest of us are not getting recompensed for our losses. you falsely portray the purchase of these CDS vehicles as guaranteed with no risk. the price/profit potential was the draw because they were not conservative munis backed by power to tax back the losses... different animal. you had to research who you were buying. of course, there was risk. you "agreed" to the contract when you bought the damn thing. no one put a gun to your head. now you want to be guaranteed AFTER you invested in risk/reward. next time be more conservative. so what if regulators “allowed” this nonstandard business. our toothless regulators allowed all sorts of opaque investing vehicles to be sold in public markets. the rest of us are not getting recompensed for our losses.
you falsely portray the purchase of these CDS vehicles as guaranteed with no risk. the price/profit potential was the draw because they were not conservative munis backed by power to tax back the losses… different animal.
you had to research who you were buying. of course, there was risk. you “agreed” to the contract when you bought the damn thing. no one put a gun to your head. now you want to be guaranteed AFTER you invested in risk/reward.
next time be more conservative.

]]> By: David Merkelhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-16888 David Merkel Sat, 16 Feb 2008 02:49:27 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-16888 The right to rehabilitate is limited to situations where capital levels are perilously low. That may or may not be true here. In rehabilitation policyholders have to be treated equitably, which is why rehabilitations of financial guarantors are so hard; I've talked about that before. In a real rehabilitation, claim payments would be delayed, and assets would build while an army of analysts figure out the likely exposures, and after that, a conservative percentage of pro-rata claims would be paid with a true-up payment at the end. The right to rehabilitate is limited to situations where capital levels are perilously low. That may or may not be true here.

In rehabilitation policyholders have to be treated equitably, which is why rehabilitations of financial guarantors are so hard; I’ve talked about that before. In a real rehabilitation, claim payments would be delayed, and assets would build while an army of analysts figure out the likely exposures, and after that, a conservative percentage of pro-rata claims would be paid with a true-up payment at the end.

]]> By: ed noonanhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-16887 ed noonan Sat, 16 Feb 2008 02:02:22 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-16887 The state has the right to place the company into rehabilitation if its financial strength is impaired. The rehabilitator has pretty broad authority, but I am unaware of any precedent that would allow different classes of insureds to be treated differently. The state has the right to place the company into rehabilitation if its financial strength is impaired. The rehabilitator has pretty broad authority, but I am unaware of any precedent that would allow different classes of insureds to be treated differently.

]]> By: David Merkelhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-16885 David Merkel Fri, 15 Feb 2008 17:59:10 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-16885 FGIC will try, but will they succeed? FGIC will try, but will they succeed?

]]> By: Donhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-16884 Don Fri, 15 Feb 2008 17:42:45 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-16884 But FGIC is going to be doing just that! But FGIC is going to be doing just that!

]]> By: nick gogertyhttp://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/comment-page-1/#comment-16883 nick gogerty Fri, 15 Feb 2008 17:23:32 +0000 http://alephblog.com/2008/02/15/split-the-financial-guarantors-in-two-you-cant-do-that/#comment-16883 where is King Solomon when you need him? where is King Solomon when you need him?

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