MBI: MBIA, More Bad Investments Arriving

Hello to my cuban and non cuban friends, I am here again to explain yet another travesty almost as bad as Fidel Castros takeover of Cuba or tearing a whole in my guayavera After reading this transcript I would rather get arrested for smuggling cigars than be caught with any money in this perfect example of bowel movements I will offer to you a copy of the transcipt quote and my translated deciphering. I will promise you a reduced accented version this time: We attached a AAA original rating levels for all of our Alt-A transactions except for one transaction where we attached a AA. More then 40% of the exposure is of the pre-2005 "vintage" and while the delinquencies are increasing in the Alt-A book they are much lower then the Alt-A universe. Hmm lower default than typical ALT -a of the 2007 season, but still rising. Oh, no PROBLEM!!! The majority of loans we securitized and bought were around the market right in the middle of the boom" other favorite tidbits include "There are a couple of deals that we have elevated to higher concern." qban " A couple like in two? Or is this a cuban raft and a couple means 20?" "Real estate owned properties and foreclosures remain high however, loss severities are averaging around 50%. " qban "So write down your asset value by half in terms of your current default rate Given this performance at this point our projections do not indicate material losses. However, we monitor the portfolio monthly and the delinquencies do continue to spike and liquidations from foreclosure and REO buckets start to accelerate we will then need to review for reserves on this portfolio. qban: "The Fit has still not hit the SHAN!" The third quarter increase was driven by material increases in both new delinquencies and back end loss experience qban: " We are still losing our donkeys and asses" For example, with all other variables remaining constant the default levels stay elevated for an additional six month period beyond your expectations we would estimate additional incurred losses of $500 million on the second lien portfolio. qban: " We will continue to bleed a slow and agonizingly painful death, like lying in the blazing sun on a raft with no food for a week" MBIAs tar exposure for HELOCs and closed end seconds was $16.2 billion December 31, 2008, which is roughly $8.7 billion closed end seconds and $7.5 billion HELOC securitizations and that the majority of those deals had been originated in 2006 and 2007. qban: " we did most of our lending on 2nd mortgages that never get paid back after foreclosure at the height of the real estate bubble" monitor the performance of the book and the reserve adequacy vis-à-vis delinquencies and we're going to be pushing forward on our litigation aggressively. Qban: "We are going to go after people with no money for money, hopefully I can bring my cousin Tony, turn these people over and shake off their loose change" investment grade corporate portfolio of $39 billion comprises diversified pools of corporate names insured with deductible to cover losses due to credit events. During the last two quarters several credit events occurred including Lehman Brothers, Washington Mutual, Fannie Freddie and three Icelandic banks. over 69% of the claims paid on the second lien book are a little over $1 billion is associated with the deals subject to the litigation that we are engaged in with the vast concentration being Countrywide and ResCap. Qban: " We like doing business with deadbeats" commercial real estate portfolio of $45 billion this a diversified global portfolio of high quality and highly rated structured deals in the global commercial sector. Thirty five billion of our net exposure in this sector is to structured CMBS pools that aren't truly CDOs. Qbans last take: I really cant pierce any deeper into this transcript without feeling completely sick to my stomach. Oh the stock goes up 16% today