Wall Street Manna

An irreverent look at Wall Street

Friday, February 1, 2008

Rescue plan for the monolines

We've heard how 8 banks are getting together to fund AmBac. So how does this help MBIA (MBI 15.78)?

By rescuing AmBac, MBI's exposure to ABK diminishes. You can see it's exposure to ABK on this presentation:
http://library.corporate-ir.net/library/88/880/88095/items/277575/Earning20call20Q4-FINAL13108.pdf

The bank bailout of ABK, secures MBI's future, by reducing it's exposure. But the shorts keep squealing. Here's why. Look at the shares of MBI that the institutions own:
http://www.nasdaq.com/asp/Holdings.asp?symbol=MBI&selected=MBI&page=holdingssummary

Insitutions hold 162,352,716 million of MBI's shares, not including the 16.1 million shares sold to Warburg the other day. Before that, MBI had 123,705,544 shares outstanding.

So institutions own 40,000,000 million more shares than those shares that actually exists.

Anyone wonder why Bill Ackman is making so much noise? What if he has to cover with real shares?

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