David Gaffen's post at MarketBeat "More Selling in MBIA" reminded me I had forgotten to post this, from the Financial Times:
Warren Buffett’s Berkshire Hathaway went ahead with plans to set up a new bond insurance company last month, just weeks after receiving an unusual call from New York state’s insurance regulator urging it to enter the multi-billion dollar market.
The move by Eric Dinallo, New York state’s superintendent of insurance, was made amid concerns that losses by Ambac, MBIA and other bond insurers, related to their exposure to risky subprime mortgage bonds, could damage their top, triple-A credit ratings.
Ajit Jain, president of Berkshire’s reinsurance unit and one of Mr Buffett’s closest lieutenants, told the Financial Times that in November, a month before Berkshire launched its new bond insurer, Mr Dinallo called to urge him to enter the market.
In the phone conversation, the regulator said Berkshire “ought to consider starting up a new bond insurance company”, Mr Jain said....MORE