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MBIA Crash Inevitable?

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Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
http://www.cnbc.com/id/25188139/for/cnbc


Hedge funds are betting MBIA goes down. If they do the spillover is a blood bath for deriviatives which will seek repayment. MBIA will not be able to cover so much as 20% and will shake the markets to the core.


http://www.bloomberg.com/apps/news?pid=20601109&sid=ayw26W322L2A&refer=home

That once-unthinkable scenario would trigger clauses in $400 billion of derivative contracts written to insure collateralized debt obligations and other securities, allowing policyholders to demand immediate payment for market losses, which have reached $20 billion, according to company filings. Downgrades of the insurers would cause a drop in rankings for the $2 trillion of debt that the companies guarantee, wiping out the value of the CDO insurance held by Wall Street firms,
 
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