More Thoughts On Ambac...

My portfolio was down -0.77% today, but since I was in a better mood, it didn't affect me that much. Yesterday, I was feeling bitter and +1.68% wasn't even good enough.

Anyway, more thoughts on our prince turned frog, ABK!

I've been researching possible reasons to declare a technical default, but so far have a lack of evidence.

If this was based on morals alone, I'd have tons of moral evidence against ABK, including a clearly two-faced approach to doing business:

Ambac Misses Interest Payment On $400 Million Bond Issue (circa 15 August 2009)... this was only a $12.3 million payment on the entire bond issue.

Ambac Financial Posts $2.2 billion Profit

Ambac Issues Going Concern Statement One Week Following $2.2 billion Profit

Ambac Misstates Financials To Meet Minimums

Ambac Financial Misses Regulatory Filing


Not having studied law is a bit of an impediment, but I am quite sure I will no longer invest in subordinated bonds after seeing this article about Bradford & Bingley, a company in the UK that deferred interest payments and got away with no technical default.

I'm not even sure if ABK was one of those financial institutions that received TARP money, but ABK keep mentioning that their financial regulators are prohibiting them from paying dividends to the holding company. So is it better to hold bonds in the holding company or the subsidiary? I'm still figuring this out.

Whilst I'm at it, I would go so far to say that the whole bailout was premeditated. Apparently, Congress is 'teeming with millionaires.' Fair weather friends, indeed!