Ackman's Letter to Moody's

Ambac, MBIA will suffer bigger losses, critic Ackman says

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet

Investors are anxious that Moody's Investors Service and Standard & Poor's Ratings Services may remove their triple-A rating on the two companies, which together insure more than $1 trillion in bonds.

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet

Ackman, who co-founded Gotham Partners LP in 1993, has been critical of MBIA's AAA ratings since 2002, when he wrote a report ``Is MBIA Triple-A?'' New York-based Pershing Square stands to profit if MBIA's and Ambac's holding companies go bankrupt. 

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet

Bond insurers pay principal and interest on bonds when the issuer can no longer make payments. They need "AAA" ratings to attract new business.

If the insurers' ratings fall, the ratings of the bonds they insured would fall as well, forcing banks to reduce the value of those bonds.

Whitney said those downgrades could lead to write-downs totaling as much as $70 billion. Nearly half of those losses could be taken by UBS AG, Merrill Lynch & Co. and Citigroup Inc., as they are the most heavily invested in insured bonds. 

Forbes
 

S&P Lowers or May Cut Ratings on $534 Billion of Mortgage Debt

By Emma Moody

Jan. 30 (Bloomberg) -- Standard & Poor's lowered or may cut ratings on $534 billion of residential mortgage securities and collateralized debt obligations.

The securities represent $270.1 billion, or 6,389 classes, of mortgage securities rated between January 2006 and June 2007 and $263.9 billion, or 1,953 classes, of CDOs, S&P said today in a statement.

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet

Negative bank reserves

The banks are busted. 

America's teetering banking system 

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#0

Bill Ackman Was Right: MBIA, Ambac on `Ratings Cliff'

Ackman, the 42-year-old hedge fund manager who says he stands to make hundreds of millions of dollars betting against MBIA Inc. and Ambac Financial Group Inc. if they go bankrupt, will tell investors at a conference in New York today that losses posted by bond insurers may threaten to breach the capital limits allowed by regulators, making them insolvent.

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet

Ambac terminates ratings contract with Fitch Ratings

SAN FRANCISCO (MarketWatch) -- Ambac Financial Group Inc. (ABK:AMBAC Inc 

ABK 2.07, -0.07, -3.3%) said Wednesday it terminated its ratings contract with Fitch Ratings Inc. "Our decision to refocus and realign our business around our core expertise in the public finance and infrastructure sectors has led us to re-evaluate our ratings needs," Ambac said in a statement. "As part of this review, we have asked Fitch to remove its ratings on Ambac and all its subsidiaries effective immediately." Fitch has maintained a AA rating on Ambac since cutting its AAA rating in mid-January. 

Vi betalar inte då ni ger oss så dåligt betyg 

Mvh Jamenvisst

A conversation with Bill Ackman 

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" Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful." Warren Buffet