STOCK MARKET WATCH -- Friday, 13 January 2012

[Tansy_Gold]

3. Bank of America, UBS Renew Demand for MBIA Insolvency Review

http://www.bloomberg.com/news/2012-01-12/bank-of-america-ubs-renew-demand-for-mbia-insolvency-review.html

Four banks suing MBIA (MBI) Inc. over the insurer’s 2009 restructuring renewed a request to a regulator to assess the finances of a unit that guaranteed toxic mortgage debt, citing “substantial additional evidence” it’s insolvent.

The lenders, including Bank of America Corp. (BAC) and UBS AG (UBSN), asked Department of Financial Services Superintendent Benjamin Lawsky for a “qualified” expert to review expected losses for MBIA Insurance Corp. The banks said they had data that “clearly demonstrates” the unit “cannot satisfy its policyholder claims in full,” Robert Giuffra, the banks’ lead counsel and a partner at Sullivan & Cromwell in New York, said in a Jan. 11 letter to Lawsky.

The banks, which bought guarantees from the insurer on securities tied to home loans, sued Armonk, New York-based MBIA and the state insurance regulator in 2009, claiming MBIA’s restructuring left it undercapitalized and possibly unable to pay future claims. Fourteen of an original 18 plaintiffs withdrew from the suits after settling with the insurer separately. Societe Generale (GLE) SA and Natixis (KN) SA are the other two banks still fighting the split.

“Although the banks have been predicting MBIA Insurance Corp.’s imminent demise for almost three years, it remains solvent and fully capable of meeting all of its expected obligations,” Kevin Brown, an MBIA spokesman, said in an e- mail. MBIA has continues to pay claims, including payments to the 14 former plaintiffs, he said. Bank of America owes MBIA about $3 billion in mortgage put-back claims, according to Brown.





I do not know what all of this means, except that it suggests to me there is some nervousness running through this business.