Warren Buffett

Warren Bufffet has agreed to insure $800bn in municipal bonds guaranteed by bond insurers Ambac, MBIA and FGIC. These insurers are in danger of losing their AAA ratings due to subprime losses. Buffet’s $5bn offer comes after creating his own bond insurer in late January.

When asked why he hasn’t bought shares of other financials at ‘cheap’ prices, Buffett responded, “Well there’s other things I feel I understand better. Just because something’s down fifty percent from where it was doesn’t mean it’s cheap. We try to stick with things we understand.”

CNBC – I Will Reinsure $800B in Municipal Bonds VIDEO
Wall Street Journal – Futures Rise on Buffet’s Offer
Bloomberg – Buffett Offers to Assume Muni Liabilities of Insurers
Bloomberg – Bond Insurance Turns Toxic for Munis as Rates Soar
CNBC – NY Insurance Superintendent Eric Dinallo makes a pitch to Warren Buffett VIDEO
Securities Industry and Financial Markets Association (SIFMA) – Municipal Bonds Credit Report