Finance 2.0

ABK and MBI are two of the monoline bond insurers that got hit heavily hit in the credit crunch. They regained some ground in recent weeks which was surpising since nothing has really changed for them.

ABK was trading near $10. That may not sound a lot but when you put in 150% share dilution that is $25! It appears no one else in the market looked at this fundamental factor. They are probably all too busy drawing stupid lines and plotting worthless averages all over the graphs.

Well yesterday ABK and MBI were put on ratings reviews. Is this any surprise? Why would anyone suddenly think these companies were fixed and on the road to making profits anywhere near pre crisis levels?

As a result ABK has tumbled and MBI will probably go too. It’s a shame I couldn’t short ABK though, not because of the short ban but simply because it’s not a stock that I have been able to buy or sell since it got removed from the S&P 500. When it was up near the 10’s a week or so ago it just looked like a diamond opportunity. MBI is looking the same, but with a short selling ban on financials I will miss out again.

Maybe I should get off my ass and get an options account?