Friday, February 15, 2008
Spitzer: No plan for bond insurer rescue
Dinallo said it was concern about the safety net for municipal bonds that prompted New York to ask Warren Buffett to price reinsurance of the municipal bond portfolios of the three largest bond insurers. "Earlier this month, Berkshire sent its proposal to the three companies. I believe that there may be other investors who would be interested in investing in the municipal side of the business," Dinallo said of Buffett's Berkshire Hathaway in his prepared remarks. In response to questions, Spitzer said he would not "force" the bond insurers to accept offers like that of Berkshire Hathaway. Still, he said the offer by Buffett's company has been good for Wall Street. "The marketplace appears to have taken that as a positive sign," Spitzer told lawmakers.
By the way, there is apparently some divine reason why muni bondholders should be bailed out at the expense of structured product holders and shareholders of bond insurers, and to the great enrichment of Saint Warren, who happens to own a big stake in one of the rating agencies Spitzer has so much trouble with.