Is Fair Value a Fair Metric for a Bond Insurer?
Is Fair Value a Fair Metric for a Bond Insurer? Tuesday May 20, 2008#spacer{clear:left}#abc #sidebar{margin-top:1.5em}zSB(3,3)The chief financial officer of MBIA, the leading insurer of municipal bonds, is in the midst of a very public fight with the Wall Street Journal. At issue is the accounting principle known as fair value. Last week, Journal reporter David Reilly blasted MBIA for downplaying the fair value numbers in its most recent earnings report and instead calling attention to something the company called analytic adjusted book value. Reilly said that a better name for this measure might have been SEEMM, or ‘shareholders equity excluding mortgage mess.” MBIAs Chuck Chaplin was not amused. In a letter to the Journal, Chaplin said it strikes us as a bit condescending for you (Reilly) to think that investors are unable to consider varying assessments of valuation presented to them at the same time and reach their own conclusions. Well, I hope that readers of this blog dont find t
