The fact that private companies could lose this much money, with such obvious Ponzi Scheme business practices, is staggering.
And when Peter can't pay Paul, what do you do?
You get the taxpayers to bail Peter out.
This story will be big. The first of many "too big to fail" stories to come. And you think $130 billion is a lot?
Just wait until Fannie and Freddie. That bailout starts with a "T".
And just one question: WHERE THE HELL WERE THE AUDITORS (AGAIN)?
Jan. 29 (Bloomberg) -- Bond insurers led by MBIA Inc. and Ambac Financial Group Inc. may lose their top AAA ratings before they benefit from any rescue plan.
The bond insurance industry stands to lose $41 billion on securities linked to subprime and other mortgages, according to JPMorgan Chase & Co. analysts.
Bond insurers' total losses may be as high as $65 billion, according to Independent Strategy, a London-based financial consulting firm set up in 1994 by David Roche, a former head of research at Morgan Stanley. The estimate assumes a loss rate of 18 to 22 percent on $250 billion of credit derivatives linked to U.S. property, plus $90 billion of insurance on foreign real estate.
The insurers will need about $130 billion to cover the losses and to recapitalize, and the cash will have to come from taxpayers, Independent Strategy said in a statement today.