Lost in the Merrill write-off was this gem. SCA commuted their CDO guarantees, giving them a billion in excess capital. But no one cared!
At least I did!
Here it was:
And the biggest winner of all of this is .53 cent stock SCA! (The stock that Goldman Sachs said had a value of zero).
SCA will be given a long hard look at today, as the assumptions made by the shorts and bears are wrong, judging by the value of the contracts written up, and the payments/settlements made, prodded by and at the behest of the Insurance Commissioner of NY.
The stock closed the next day on Wednesday at .84 cents, and you had all you wanted at .88 cents.
Today it's at $2.54!
300%. In three days.
Did anyone see what happened to Ambac today? A $150 million dollar gain on the commutation of CDO contracts with Citigroup. And this was the CDO squared transaction!
Which means Citigroup is adjusting their books for a Merrill like writedown.
Which means you sell your bonds, and now buy stocks!
And Ambac gets to run.
How tough is that?
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