MBI - MBIA Inc.

[muscleman]

I start to wonder if MBIA is being headstrong instead of BAC in the negotiation.

 

Just ask yourself this...

 

Has the BAC CEO written letters to shareholders fuming emotionally about the MBIA litigation?

 

Haha. You are right.

Just curious, as a BAC holder, what do you think about article 77?

[ERICOPOLY]

I start to wonder if MBIA is being headstrong instead of BAC in the negotiation.

 

Just ask yourself this...

 

Has the BAC CEO written letters to shareholders fuming emotionally about the MBIA litigation?

 

Haha. You are right.

Just curious, as a BAC holder, what do you think about article 77?

 

I am weak on legal knowledge.  I defer to the earnings power of BofA to take care of any shortcomings.  That's the margin of safety, and there is plenty of it.

 

I just know that MBIA put themselves in this hole by hitching their wagon to Countrywide, and by the grace of God BofA bought Countrywide so now Jay Brown and his crew can tell their shareholders that all the fault lies with BofA instead of claiming any credit for digging this hole in the first place.  I mean really guys, you thought Countrywide was not fudging?  The music played, you danced, take some blame.

[muscleman]

I start to wonder if MBIA is being headstrong instead of BAC in the negotiation.

 

Just ask yourself this...

 

Has the BAC CEO written letters to shareholders fuming emotionally about the MBIA litigation?

 

Haha. You are right.

Just curious, as a BAC holder, what do you think about article 77?

 

I am weak on legal knowledge.  I defer to the earnings power of BofA to take care of any shortcomings.  That's the margin of safety, and there is plenty of it.

 

I just know that MBIA put themselves in this hole by hitching their wagon to Countrywide, and by the grace of God BofA bought Countrywide so now Jay Brown and his crew can tell their shareholders that all the fault lies with BofA instead of claiming any credit for digging this hole in the first place.  I mean really guys, you thought Countrywide was not fudging?  The music played, you danced, take some blame.

 

Well, just like those financial institutions, we should put the past behind ourselves too. Perhaps it is better to spend more time on investment than being cynic about the past? :D

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

[ERICOPOLY]

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

 

I'm not sure.  Could very well be a good bet.  However in late 2011 I had equal parts MBI and BAC.  I sold all of the MBI in the $9 range and put it all in BAC.  Txlaw asked me why and I told him that I thought Jay Brown was being irrational in asking for 100% recovery and it would get dragged on forever.  So, what I said could have been absolute drivel, and what may have passed could have been pure luck, but so far I'm happy I did that. 

 

I don't know if the BAC management is being at all emotional about this trial, but if they are, I'd bet it's because they don't like Jay Brown's tone given that Brown put himself in this position whereas the guys he's throwing stones at, BAC management, are new in their jobs and are just trying to clean up their predecessor's mistakes.  Plus, MBI made a deal with Merrill Lynch at the time when BAC didn't own them, so it has nothing at all to do with whatever Countrywide did or has not done.

 

From as far as I can tell, the internet doesn't agree with me -- people seem to believe MBI is being beaten down by the mean bully BAC.  But then, isn't that why the MBIA CEO writes those scathing shareholder letters?  I guess it is dirty, but it works.

[MYDemaray]

I'm a casual observer here with no position, and a long position in BAC...I think there is room for both to win.  I am curious to know why everyone is so confident in the loan from National being properly secured.  Does the possibility exist that they have pledged collateral that rightfully belongs to policy holders, despite their insistence to the contrary? 

[muscleman]

I'm a casual observer here with no position, and a long position in BAC...I think there is room for both to win.  I am curious to know why everyone is so confident in the loan from National being properly secured.  Does the possibility exist that they have pledged collateral that rightfully belongs to policy holders, despite their insistence to the contrary?

 

I am still studying those loans, but I think the loan is approved by NYDFS, and the loan itself has not caused any litigation, so it should be correctly pledged.

[muscleman]

http://finance.yahoo.com/news/bank-america-enters-165-million-142400575.html

 

Not sure how much impact this has on MBIA. Probably not much.

[Telluride]

I'm a casual observer here with no position, and a long position in BAC...I think there is room for both to win.  I am curious to know why everyone is so confident in the loan from National being properly secured.  Does the possibility exist that they have pledged collateral that rightfully belongs to policy holders, despite their insistence to the contrary?

 

I am still studying those loans, but I think the loan is approved by NYDFS, and the loan itself has not caused any litigation, so it should be correctly pledged.

 

Is it possible that the insurance regulator would take both Corp and National into a Receivership role to sort everything out and then bring whatever it could back out once the overall situation with claims, inter-party loans, putbacks, fraudulent conveyance hearings is settled?

[valuecfa]

Some new appellate court rulings out: dont have time to post at the moment

[valuecfa]

Herzeca posted some twitter comments that i can easily copy & paste:

 

1. re $bac and $mbi, cy appellate ct upholds $mbi on no causation between breach and loss, and no need for loan to be in default to putback

 

2. $mbi doesnt require rescissory damages where there is an adequate alternative rememdy = putback to $bac of all breaching loans

 

3. $bac's sec filings say that its reserves are inadequate if causation is upheld. well causation has just been upheld!

 

4. $mbi can still recover all damages by putting back all breach loans and proving it would make no payments if cash put in trust.

[Cardboard]

"Appeals Court says MBIA (MBI) not entitled to rescissory damages; Countrywide wins reversal of ruling in MBIA lawsuit in NY"

 

This is what can be found on the Internet, but there is no source, no article. It was even on the Bloomberg Twitter section. Don't know if it is a rumour, can't find any credible info.

 

Cardboard

[Guest bottomsup]

Go to page 30 of the ruling:

 

http://www.courts.state.ny.us/courts/ad1/calendar/appsmots/2013/April/2013_04_02_dec.pdf

 

Herzeca's analysis is bang on.

 

"Appeals Court says MBIA (MBI) not entitled to rescissory damages; Countrywide wins reversal of ruling in MBIA lawsuit in NY"

 

This is what can be found on the Internet, but there is no source, no article. It was even on the Bloomberg Twitter section. Don't know if it is a rumour, can't find any credible info.

 

Cardboard

[txlaw]

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

 

I'm not sure.  Could very well be a good bet.  However in late 2011 I had equal parts MBI and BAC.  I sold all of the MBI in the $9 range and put it all in BAC.  Txlaw asked me why and I told him that I thought Jay Brown was being irrational in asking for 100% recovery and it would get dragged on forever.  So, what I said could have been absolute drivel, and what may have passed could have been pure luck, but so far I'm happy I did that. 

 

I don't know if the BAC management is being at all emotional about this trial, but if they are, I'd bet it's because they don't like Jay Brown's tone given that Brown put himself in this position whereas the guys he's throwing stones at, BAC management, are new in their jobs and are just trying to clean up their predecessor's mistakes.  Plus, MBI made a deal with Merrill Lynch at the time when BAC didn't own them, so it has nothing at all to do with whatever Countrywide did or has not done.

 

From as far as I can tell, the internet doesn't agree with me -- people seem to believe MBI is being beaten down by the mean bully BAC.  But then, isn't that why the MBIA CEO writes those scathing shareholder letters?  I guess it is dirty, but it works.

 

One thing about Jay Brown, and then I'll go back to staying silent on MBIA.  From the proxy:

 

Under the terms of the employment arrangement Mr. Brown entered with the Company when he rejoined the Company in February 2008, Mr. Brown received an annual salary of $500,000 and a maximum annual incentive bonus of $2,000,000 payable based on performance as determined by the Compensation Committee. He was not eligible for any LTI awards or for a change in salary during the term of this employment arrangement which lapsed on December 31, 2012. On February 18, 2013, Mr. Brown forfeited 2,925,990 shares of restricted stock of the Company that were awarded when he joined the Company in 2008 and approved at the Annual Meeting of Shareholders on May 1, 2008. The grant provided for full forfeiture of restricted stock if the Company’s common stock did not maintain an average closing share price in excess of $16.20 on each day of a consecutive 20-day period on or before February 18, 2013. Such condition was not met resulting in the forfeiture of these shares.

 

Mr. Brown does not have an employment or severance agreement and is not entitled to any benefits or other payments in connection with any change of control of the Company.

 

Mr. Brown’s salary was increased to $1,000,000 for 2013 and, as noted above, Mr. Brown requested that the Company not take any action with respect to any 2012 bonus. Mr. Brown’s base salary was adjusted to bring it in line with the market median base salary.

 

I'm happy Jay Brown is looking out for shareholders and not just himself. 

 

I'm pretty sure BAC management is well aware that Brown would be financially hammered if he did not cave to BAC demands.  So who's bullying who here?

[ERICOPOLY]

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

 

I'm not sure.  Could very well be a good bet.  However in late 2011 I had equal parts MBI and BAC.  I sold all of the MBI in the $9 range and put it all in BAC.  Txlaw asked me why and I told him that I thought Jay Brown was being irrational in asking for 100% recovery and it would get dragged on forever.  So, what I said could have been absolute drivel, and what may have passed could have been pure luck, but so far I'm happy I did that. 

 

I don't know if the BAC management is being at all emotional about this trial, but if they are, I'd bet it's because they don't like Jay Brown's tone given that Brown put himself in this position whereas the guys he's throwing stones at, BAC management, are new in their jobs and are just trying to clean up their predecessor's mistakes.  Plus, MBI made a deal with Merrill Lynch at the time when BAC didn't own them, so it has nothing at all to do with whatever Countrywide did or has not done.

 

From as far as I can tell, the internet doesn't agree with me -- people seem to believe MBI is being beaten down by the mean bully BAC.  But then, isn't that why the MBIA CEO writes those scathing shareholder letters?  I guess it is dirty, but it works.

 

One thing about Jay Brown, and then I'll go back to staying silent on MBIA.  From the proxy:

 

Under the terms of the employment arrangement Mr. Brown entered with the Company when he rejoined the Company in February 2008, Mr. Brown received an annual salary of $500,000 and a maximum annual incentive bonus of $2,000,000 payable based on performance as determined by the Compensation Committee. He was not eligible for any LTI awards or for a change in salary during the term of this employment arrangement which lapsed on December 31, 2012. On February 18, 2013, Mr. Brown forfeited 2,925,990 shares of restricted stock of the Company that were awarded when he joined the Company in 2008 and approved at the Annual Meeting of Shareholders on May 1, 2008. The grant provided for full forfeiture of restricted stock if the Company’s common stock did not maintain an average closing share price in excess of $16.20 on each day of a consecutive 20-day period on or before February 18, 2013. Such condition was not met resulting in the forfeiture of these shares.

 

Mr. Brown does not have an employment or severance agreement and is not entitled to any benefits or other payments in connection with any change of control of the Company.

 

Mr. Brown’s salary was increased to $1,000,000 for 2013 and, as noted above, Mr. Brown requested that the Company not take any action with respect to any 2012 bonus. Mr. Brown’s base salary was adjusted to bring it in line with the market median base salary.

 

I'm happy Jay Brown is looking out for shareholders and not just himself. 

 

I'm pretty sure BAC management is well aware that Brown would be financially hammered if he did not cave to BAC demands.  So who's bullying who here?

 

The one that is being bullied is the one that is already toast in the alternate reality where BAC never bought Countrywide.  They're now basically complaining that the lifeboat is trying to toss them overboard -- which may be true, but keeping in mind that they should have already been drowned.

 

Anyways, I'm working off of the assumption that Countrywide on it's own does not have the money to pay all of these R&W claims in total.  This is the risk that Brown's company tied their future to.  That should have been their fate for taking on so much risk with such a weak counter-party.  They basically are getting saved (creating a the moral hazard?) by the court system which is going to make BofA backstop Countrywide.

 

I guess I strongly suspect that industry insiders (such as Brown) knew that Countrywide wasn't the world-class company that Mozillo still claims it to be, but they kept on dealing with them anyhow.  It seems a shame that he can pocket the premiums if defaults don't happen, and can take BofA to court (instead of just Countrywide) when defects do happen.  That seems unethical if he knew the loans were garbage in the first place.  He would have been punished for this properly if his only recourse was to Countrywide.  That counter-party risk creates a need for due-diligence which would help prevent this kind of financial crisis in the first place.  And Brown's letter singles out BofA as a bad actor in the financial crisis, seemingly taking no credit for his own role in the game.

 

[MYDemaray]

 

....The grant provided for full forfeiture of restricted stock if the Company’s common stock did not maintain an average closing share price in excess of $16.20 on each day of a consecutive 20-day period on or before February 18, 2013. Such condition was not met resulting in the forfeiture of these shares.

 

....I'm happy Jay Brown is looking out for shareholders and not just himself. 

 

 

How do you interpret forfeiture of shares, subject to contractual provisions, as "looking out for the shareholders and not just himself"?  Seems to me he didn't have a choice in the matter.  It's not as if he woke up one morning, assembled the board, and said -- "You know what guys, the shareholders deserve better -- I forfeit my shares." 

 

I'm not suggesting that Brown isn't looking out for shareholders (of course he is, the way he is trying to squeeze blood out of the BAC stone), but this is not the evidence I would personally rely on.

[txlaw]

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

 

I'm not sure.  Could very well be a good bet.  However in late 2011 I had equal parts MBI and BAC.  I sold all of the MBI in the $9 range and put it all in BAC.  Txlaw asked me why and I told him that I thought Jay Brown was being irrational in asking for 100% recovery and it would get dragged on forever.  So, what I said could have been absolute drivel, and what may have passed could have been pure luck, but so far I'm happy I did that. 

 

I don't know if the BAC management is being at all emotional about this trial, but if they are, I'd bet it's because they don't like Jay Brown's tone given that Brown put himself in this position whereas the guys he's throwing stones at, BAC management, are new in their jobs and are just trying to clean up their predecessor's mistakes.  Plus, MBI made a deal with Merrill Lynch at the time when BAC didn't own them, so it has nothing at all to do with whatever Countrywide did or has not done.

 

From as far as I can tell, the internet doesn't agree with me -- people seem to believe MBI is being beaten down by the mean bully BAC.  But then, isn't that why the MBIA CEO writes those scathing shareholder letters?  I guess it is dirty, but it works.

 

One thing about Jay Brown, and then I'll go back to staying silent on MBIA.  From the proxy:

 

Under the terms of the employment arrangement Mr. Brown entered with the Company when he rejoined the Company in February 2008, Mr. Brown received an annual salary of $500,000 and a maximum annual incentive bonus of $2,000,000 payable based on performance as determined by the Compensation Committee. He was not eligible for any LTI awards or for a change in salary during the term of this employment arrangement which lapsed on December 31, 2012. On February 18, 2013, Mr. Brown forfeited 2,925,990 shares of restricted stock of the Company that were awarded when he joined the Company in 2008 and approved at the Annual Meeting of Shareholders on May 1, 2008. The grant provided for full forfeiture of restricted stock if the Company’s common stock did not maintain an average closing share price in excess of $16.20 on each day of a consecutive 20-day period on or before February 18, 2013. Such condition was not met resulting in the forfeiture of these shares.

 

Mr. Brown does not have an employment or severance agreement and is not entitled to any benefits or other payments in connection with any change of control of the Company.

 

Mr. Brown’s salary was increased to $1,000,000 for 2013 and, as noted above, Mr. Brown requested that the Company not take any action with respect to any 2012 bonus. Mr. Brown’s base salary was adjusted to bring it in line with the market median base salary.

 

I'm happy Jay Brown is looking out for shareholders and not just himself. 

 

I'm pretty sure BAC management is well aware that Brown would be financially hammered if he did not cave to BAC demands.  So who's bullying who here?

 

The one that is being bullied is the one that is already toast in the alternate reality where BAC never bought Countrywide.  They're now basically complaining that the lifeboat is trying to toss them overboard -- which may be true, but keeping in mind that they should have already been drowned.

 

Anyways, I'm working off of the assumption that Countrywide on it's own does not have the money to pay all of these R&W claims in total.  This is the risk that Brown's company tied their future to.  That should have been their fate for taking on so much risk with such a weak counter-party.  They basically are getting saved from the moral hazard by the court system which is going to make BofA backstop Countrywide.

 

No dispute from me re: Ken Lewis' Folly and MBIA's good luck.

 

Just pointing out that Jay Brown could very well be simultaneously acting rationally and in the best interest of shareholders (rather than himself).  If we're going to speculate that he's being recalcitrant in the face of reasonable BAC offers, we may as well speculate the other way as well.  That he's simply playing out the game in a way that maximizes shareholder return.  He certainly hasn't maximized his own wealth.

 

This BAC v. MBIA thing is very game theory-esque.  Trying not to get caught up on one team's side, especially since I have interests in both teams.

[Guest bottomsup]

Insightful or not, I wish I had Ericopoly's "luck" in gauging the character of management.  I unfortunately don't.

 

I invested in MBIA strictly on the basis of numbers and upcoming catalysts (receivership forcing outcomes), but the character of management definitely speaks to whether this becomes a longer-term holding when the value gap closes.

 

In either event, I'd be curious, Ericopoly, given that you're sensitive to the likely outcome of this investment (if I'm reading you correctly), why you don't hold your nose and return to investing in MBIA?

 

I'm reminded of the recapitalization of the banks.  Folks were outraged by the bailouts, but a lot of them didn't separate their feelings from what was occurring...namely that the banks were going to survive (albeit it to different degrees) and that they could profit from this.

 

You are right. Had Countrywide not been bought by BAC, MBIA would have been dead now. But I don't care about that. I just care if this is a good bet for now.

 

I'm not sure.  Could very well be a good bet.  However in late 2011 I had equal parts MBI and BAC.  I sold all of the MBI in the $9 range and put it all in BAC.  Txlaw asked me why and I told him that I thought Jay Brown was being irrational in asking for 100% recovery and it would get dragged on forever.  So, what I said could have been absolute drivel, and what may have passed could have been pure luck, but so far I'm happy I did that. 

 

I don't know if the BAC management is being at all emotional about this trial, but if they are, I'd bet it's because they don't like Jay Brown's tone given that Brown put himself in this position whereas the guys he's throwing stones at, BAC management, are new in their jobs and are just trying to clean up their predecessor's mistakes.  Plus, MBI made a deal with Merrill Lynch at the time when BAC didn't own them, so it has nothing at all to do with whatever Countrywide did or has not done.

 

From as far as I can tell, the internet doesn't agree with me -- people seem to believe MBI is being beaten down by the mean bully BAC.  But then, isn't that why the MBIA CEO writes those scathing shareholder letters?  I guess it is dirty, but it works.

[Cardboard]

"http://www.bloomberg.com/news/2013-04-02/mbia-wins-ruling-on-loan-buybacks-in-bank-of-america-lawsuit-1-.html?cmpid=yhoo"

 

Sounds to me like the appeal court has upheld the lower court judgement other than rescission which is not something that MBIA needed or wanted. Do I get this right?

 

I guess it reinforces once again the case that MBIA has against BAC.

 

Cardboard

 

 

[HJ]

"http://www.bloomberg.com/news/2013-04-02/mbia-wins-ruling-on-loan-buybacks-in-bank-of-america-lawsuit-1-.html?cmpid=yhoo"

 

Sounds to me like the appeal court has upheld the lower court judgement other than rescission which is not something that MBIA needed or wanted. Do I get this right?

 

I guess it reinforces once again the case that MBIA has against BAC.

 

Cardboard

 

Does "denying recissory damage" mean anything in practice?  Are we going back to sampling vs. individual case by case proof that there is miss-representation at origination to calculate damage? 

[txlaw]

 

....The grant provided for full forfeiture of restricted stock if the Company’s common stock did not maintain an average closing share price in excess of $16.20 on each day of a consecutive 20-day period on or before February 18, 2013. Such condition was not met resulting in the forfeiture of these shares.

 

....I'm happy Jay Brown is looking out for shareholders and not just himself. 

 

 

How do you interpret forfeiture of shares, subject to contractual provisions, as "looking out for the shareholders and not just himself"?  Seems to me he didn't have a choice in the matter.  It's not as if he woke up one morning, assembled the board, and said -- "You know what guys, the shareholders deserve better -- I forfeit my shares." 

 

I'm not suggesting that Brown isn't looking out for shareholders (of course he is, the way he is trying to squeeze blood out of the BAC stone), but this is not the evidence I would personally rely on.

 

You're missing the point of my post. 

 

There has been speculation that Jay Brown has spurned BAC's very reasonable offers because he's being recalcitrant and irrational.  What I'm pointing out is that would probably mean that Brown has made a pretty expensive personal financial decision for the sake of being stubborn. 

 

In other words, I'm suggesting that Brown is not being irrational, and that if he had settled earlier for a "non-economic" deal (MBIA continues to say they won't settle for a non-economic deal), he probably would have had a close to $50 million payoff by now.  I am assuming, of course, that MBIA would have traded above $16.20 if a settlement had come earlier.

 

So I'm directly disputing folks who are calling into question the character/actions of Jay Brown. 

 

And, btw, I wouldn't criticize Moynihan's character/actions either. 

 

As I said in my last post, this is very game theory-esque.  I suspect everyone is being rational, which is why I found Herzeca's post interesting.

[Cardboard]

Ericopoly,

 

"They basically are getting saved (creating a the moral hazard?) by the court system which is going to make BofA backstop Countrywide."

 

BAC bought Countrywide and all the assets AND liabilities that came with it. That is the way the law works. That is the risk that they chose to take when they bought Countrywide. If things had turned out better for BAC with Countrywide then they would also have turned out better for MBI.

 

If Countrywide had stayed independent and housing had turned out as it is then yes, MBI Insurance Corp. would be toast, but who cares? That is not the reality today in front of our eyes.

 

And between Brown and Moynihan, I will take Brown any time to defend my interests. His money is on the line. Moynihan does not give a damn since he is being handed out restricted shares, options, bonuses and a big fat salary for basically taking down a stock from mid-teens down to $5 and back up to $12 and diluting the heck out of it by giving a sweet deal to uncle Warren. He was not even smart enough to ask for a proper return of capital from regulators. $5 billion was a joke. Wonderful performance!

 

Cardboard

 

[MYDemaray]

In other words, I'm suggesting that Brown is not being irrational, and that if he had settled earlier for a "non-economic" deal (MBIA continues to say they won't settle for a non-economic deal), he probably would have had a close to $50 million payoff by now.

 

I see.  Understood.

[ERICOPOLY]

Ericopoly,

...

BAC bought Countrywide and all the assets AND liabilities that came with it. That is the way the law works. That is the risk that they chose to take when they bought Countrywide.

 

I don't need to be told this.  This is not an area where I disagree.  Thus I don't complain about the settlements that they've made thus far.

 

The kind of thing that I hate is when a bad actor points a finger at another bad actor, and meanwhile declaring himself clean.  That's really what I'm complaining of.  You can see it in his letters where he explicitly calls BofA a bad actor in the financial crisis... this coming from someone who knowingly wrapped Countrywide's bad loans hoping to:

A)  pocket the premiums if loans don't go bad

B)  just rely on the courts for R&W claims if they do go bad.

 

I feel like if people who tried this sort of thing bore the consequences of their counter-party's solvency, then a lesson would be taught in doing due diligence for the loans you agree to wrap with insurance.

 

It is relatively expensive for society to protect people through the courts who knowingly wrap bad loans as a no-risk strategy.

 

Thus, a bad actor gets away with it.  I wish things worked out differently for him and he could be taught a lesson in responsibility.  Mostly, because he continues to run his mouth about this being BofA's cause and not his own.  A little bit of admission of guilt from him and I'd be fine with it.  But if we walks away from this bearing 0% of the losses, and no admission of guilt, I might feel a bit like another bad actor walked away from the crisis without a scratch.

 

Now, would a good actor knowingly wrap a bad loan from Countrywide with the attitude that if it goes bad he'll just take it to the courts for for R&W recoveries?

 

This isn't related to my being a BAC shareholder -- I'm happy for them to pay their share per all the rest of the settlements.  100% is where I draw the line, because it just rewards people like Brown for their seedy strategy.

 

Of course, this all assumes that Brown knew Countrywide was underwriting sub-par loans.  I guess that can just be my assumption that I cannot prove.

[Parsad]

Ericopoly,

...

BAC bought Countrywide and all the assets AND liabilities that came with it. That is the way the law works. That is the risk that they chose to take when they bought Countrywide.

 

I don't need to be told this.  This is not an area where I disagree.  Thus I don't complain about the settlements that they've made thus far.

 

The kind of thing that I hate is when a bad actor points a finger at another bad actor, and meanwhile declaring himself clean.  That's really what I'm complaining of.  You can see it in his letters where he explicitly calls BofA a bad actor in the financial crisis... this coming from someone who knowingly wrapped Countrywide's bad loans hoping to:

A)  pocket the premiums if loans don't go bad

B)  just rely on the courts for R&W claims if they do go bad.

 

I feel like if people who tried this sort of thing bore the consequences of their counter-party's solvency, then a lesson would be taught in doing due diligence for the loans you agree to wrap with insurance.

 

It is relatively expensive for society to protect people through the courts who knowingly wrap bad loans as a no-risk strategy.

 

Thus, a bad actor gets away with it.  I wish things worked out differently for him and he could be taught a lesson in responsibility.  Mostly, because he continues to run his mouth about this being BofA's cause and not his own.  A little bit of admission of guilt from him and I'd be fine with it.  But if we walks away from this bearing 0% of the losses, and no admission of guilt, I might feel a bit like another bad actor walked away from the crisis without a scratch.

 

Now, would a good actor knowingly wrap a bad loan from Countrywide with the attitude that if it goes bad he'll just take it to the courts for for R&W recoveries?

 

This isn't related to my being a BAC shareholder -- I'm happy for them to pay their share per all the rest of the settlements.  100% is where I draw the line, because it just rewards people like Brown for their seedy strategy.

 

Of course, this all assumes that Brown knew Countrywide was underwriting sub-par loans.  I guess that can just be my assumption that I cannot prove.

 

I agree 100% with this.  There is another out for BAC which they've chosen not to take...just declare Countrywide bankrupt and dispose of it.  That would be akin to what MBIA has done with one of their subs to preserve the holding company, yet BAC actually chose not to screw everyone over, be accountable, and come to a reasonable settlement with all claimants.  Cheers! 

[muscleman]

"Appeals Court says MBIA (MBI) not entitled to rescissory damages; Countrywide wins reversal of ruling in MBIA lawsuit in NY"

 

This is what can be found on the Internet, but there is no source, no article. It was even on the Bloomberg Twitter section. Don't know if it is a rumour, can't find any credible info.

 

Cardboard

 

I think some market manipulators try to use this falsely interpreted news to affect the market. Look at the volume around this time!