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Monolines Ackmans Latest Plan

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Feb 21 2008 12:00am EDT

Monolines: Ackman's Latest Plan

Has anybody not seen Bill Ackman's latest plan for what should happen to the monolines? It's been doing the email rounds for a couple of days now, but finally it's hit the web: if you want to download the full 14-page presentation, it can be found here. (Thanks to Todd Sullivan for the link.) It's interesting, but the reaction from anybody who isn't massively short the monolines has been so unanimously negative that I'm pretty sure it's not going to go anywhere.

Update: For a more informed take on the Ackman plan, see Yves Smith. Money quote:

If the capital (technically, reserves, that's the name for the cushion at the insurance subsidiary level) is insufficient for the combined entities, merely splitting them cannot suddenly make things better. In fact, the boundary condition is that the reserves needed to properly capitalize the combined book of risks is less than or equal to the reserves needed to insure them separately.

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