Ambac is “back” … to haunt the markets
Analysts are still way off getting the point in this crisis …
Ambac Q1 result was a net loss of $11.69 a share, versus net income of $2.02 a year earlier, the company said. Its operating loss in the latest quarter was $6.93 a share.
Ambac was expected to report a loss of $1.51 a share, according to the average estimate of seven analysts polled by Thomson Reuters. However, the range of forecasts varied widely, from a profit of 71 cents a share to a loss of $5.34 a share.
This means, that even the most bearish analyst did not come close … stupidity rules!
BTW … the loss was bigger than the capital, they raised recently … so remember … if they get the well deserved downgrade, the domino effect will ripple through the financials again … AUTSCH!!!
“We estimate Ambac will need $7 billion to $10 billion to support its guarantee of $8.8 billion of subprime mortgages and $29 billion of CDO’s,” Egan-Jones Ratings, a rating agency that’s paid by investors rather than issuers said. “Unfortunately, with a market cap of $1.3 billion, Ambac has little ‘room’ to raise the capital it needs to be considered a true AAA credit.”
At today’s close, market cap dropped to below $995 million … 
MBIA shares were down 33% in sympathy 
EMERGENCY CALL for Mr Paulson and his cheerleaders …
Tags: Ambac, bond insurers, MBIA, ratings, subprime
