Reuters have obtained a copy of the testimony MBIA has delivered to a subcommittee of the U.S. House Committee on Financial Services. The hearing is due later on Thursday.
Unable or unwilling to actually explain itself, or its problems, the bond insurer has decided instead that its whole crisis has been caused by Bill Ackman, who is shorting its stock via his hedge fund, Pershing Square.
Nevermind the fact that Bill Ackman has been shorting MBIA shares for two years - well before the problems for MBIA really took off. Reuters:
MBIA faulted what it called “the unscrupulous and dangerous market manipulation activities of short sellers,” trying to undermine market confidence in MBIA to drive the company’s share price to nearly zero.
It said the practice and dissemination of “half-truths and misleading information” should be “investigated and curtailed,” and called on Congress to work on the matter with the U.S. Securities and Exchange Commission.
MBIA specifically faulted Ackman, and included as an appendix a timeline of actions by Ackman, and to a lesser extent by other short sellers.
The defence is patently absurd, and elsewhere in the deposition, MBIA is pointedly vague. Explaining its capital position, MBIA states “the standard has been somewhat of a moving target.” Odd that, for a sitting duck.
As for the charge of “half truths and misleading information”, has MBIA not heard? Mr Ackman published all of his data, models and underlying assumptions as open source research here.
