tag:blogger.com,1999:blog-2611021408437270881.post7340028367970382435..comments2024-03-18T23:59:39.885-07:00Comments on Skeptical CPA: Monolines-End of the Line?Independent Accountanthttp://www.blogger.com/profile/07800220849565219709noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2611021408437270881.post-87809615636313373182008-02-09T17:46:00.000-08:002008-02-09T17:46:00.000-08:00The monolines had a right to exist, but shouldn't ...The monolines had a right to exist, but shouldn't have. My point is: the insurance was economic garbage. Muni bond buyers would have been better off not having the insurance and buying uninsured munis. That Buffett wants to go into this business shows the product is overpriced. He wouldn't want to sell it otherwise. It's a zero-sum game, what the monolines get, the muni bond holders lose. More and more municipalities are foregoing insurance now because they figured out it is overpriced. The monolines business model was simple: selling a public relations story to frightened old people who do not understand expected value. The monolines typically paid out about 30% of their muni bond premiums to claimants. Who needs such insurance? Self-insure.Independent Accountanthttps://www.blogger.com/profile/07800220849565219709noreply@blogger.comtag:blogger.com,1999:blog-2611021408437270881.post-26289848286714087342008-02-09T17:18:00.000-08:002008-02-09T17:18:00.000-08:00When you say they have no business model or right ...When you say they have no business model or right to existence, please back up that statement. Bonds have been insured for he past 40 years. Buffett recently applied for a license to insure municipal bonds.AlbertMhttps://www.blogger.com/profile/17598086741018520576noreply@blogger.com