Ambac Financial Group, Inc. (ABK)

[NOBama]

Ambac Financial cuts exposure to 4 CDOs worth $3.5 billion, analyst reduces loss estimates

NEW YORK (AP) -- Ambac Financial Group Inc.'s agreement to reduce its exposure to troubled collateralized debt obligations late Wednesday led an analyst to reduce her projected losses for the struggling bond insurer.

On Wednesday, Ambac said it paid about $1 billion in cash to cut exposure to four CDOs valued at about $3.5 billion. The deal will actually allow Ambac to record gains during the fourth quarter because it had taken write-downs on the CDOs beyond the $1 billion payment.

Goldman Sachs Group Inc. analyst Monica Gabel decreased her 2008 and 2009 loss estimates because of the reduced CDO exposure. Gabel now expects Ambac to lose $17.35 per share in 2008, compared with a previous loss estimate of $17.80 per share.
Ambac is also now likely to lose $4.50 per share in 2009, Gabel wrote in a research note, compared with a prior estimate for a loss of $6.40 per share.

So-called CDOs are complex financial instruments that combine various slices of debt, including other CDOs and bonds backed by mortgages. As mortgages have increasingly defaulted over the past year and a half, the expectations for losses on bonds tied to them has grown.

I think this is exactly what these companies need to start doing. Eat their losses and move on.

I took a small position in this thing (pre-market). Sold it at cost. Lost about $15. Next case...

 

[NOBama]

Dammit, I wish I'd of had more confidence in this trade.

 

[NOBama]

You're an idiot, man. I told you this pig was heading north.

 

[DavidS]

One year target at $2.... it's at $1.39 right now.

 

[NOBama]

One year target at $2.... it's at $1.39 right now.

One Year?

One DAY is an eternity (for me) right now!

I'll settle fo 50% profit on day trades until things "change".

This one spooked me when the market started heading due south this AM. It was an impulse trade anyway. I know better but, that's what happens when you get out of your comfort zone.

Once I did it, I should have stuck it out. Hell, it was only a $960 trade. I could have walked @ 1.44 and made some pocket change.

 

[NOBama]

BTW, glad you replied. I thought I was in invisable mode today.

 

[PoliticalChic]

I can't day trade. It takes too much out of me.

 

[DavidS]

Closed out at 1.26. Glad you didn't buy at $1.37.

 

[NOBama]

@ 1.26 I would have make $300 or 31.25% on it.

It's all water under the bridge (to nowhere) now.