Trader Talk

Buffett's Bond Insurer "Rescue" Offer Lifts Futures

Stock futures have rallied about 6 points, bond futures have declined as Warren Buffet appeared on CNBC saying he has offered to take over the muni bond insurance exposure from the big 3 bond insurers (MBIA, Ambac, and FGIC)--about $800 billion worth.

He did not offer to take over the CDO exposure. The plan would give bond insurers thirty days to come up with a better deal. One bond insurer (he did not say who) has already rejected the offer.

Ambac ,MBIA   up about 4 percent.

The International Council of Shopping Centers said sales for the week rose 1.8 percent from the year ago period and fell .7 percent week over week. They gave their expectations for Feb sales to be up .5 percent to 1 percent y/o/y. Jan sales were the slowest in at least 38 yrs of monthly tracking according to the ICSC.

The Greenwich Global Hedge Fund Index fell 2.4 percent in January, the biggest monthly decline since July 2002, amid severe declines in global equity markets; the S&P 500 fell 6.0 percent.

During January, 79 percent of hedge funds outperformed the S&P 500, with 33 percent ending the month in positive territory.


1) Credit Suisse said its profit dropped 72 percent from the same period last year, largely on writedowns of $1.88 billion related to subprime.

2) Monsanto   was up 3 percent pre-open as they raised their full year guidance based on a strong outlook for its seed business.

3) GM posted a confusing earnings report. Earnings excluding charges came in at $0.08; expectations were for a loss of $0.54. However, there was also a $1.6 billion tax benefit. Should that be included or excluded? That is typically excluded, which would drop the number well below expectations (to a loss of perhaps $0.72). GM down 3 percent pre-open.

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