More Bad News From MBIA

The WSJ reports

Confidence in top bond insurer MBIA Inc. plummeted Thursday after the guarantor disclosed on its Web site that it had $8.1 billion in exposure to complex and risky securities backed by home loans.

The $8.1 Billion risky securities are CDOs-squared, which repackage other CDOs and securities linked to subprime mortgages. We are seeing spreads on credit default swap soar to over 570 basis points. “That means it costs $570,000 a year for an investor to protect $10 million in MBIA bonds from default for five years.” Eleven weeks ago the stock of MBIA (MBI) was about $70 per share, Today it broke $20.

MBIA (MBI) CDOs Mover Mike

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