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.
http://aaronandmoses.blogspot.com/2008/07/merrills-writedown.html
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.
As advertised!
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!
http://biz.yahoo.com/bw/080801/20080801005364.html?.v=1
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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