Sunday, December 30, 2007

Who you gonna call?

Warren Buffett is getting into the Municipal Bond insurance business. And if you are a municipality, you can either pay the premium to Buffett for the AAA rating, or you can fore go Buffett's fee and skip the insurance entirely.

Or you can call up beleaguered Ambac or MBIA for insurance, who want to charge you higher rates while having suspect capital backing their ratings.

It's a brilliant move on Buffett's part. Ambac and MBIA better raise more capital, and in a hurry, or they'll be a ghost of their former selves.

Who you gonna call?

1 comment:

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