Friday, December 28, 2007

Saw This Coming


I knew this would happen and I didn't write about it here!!! Damn damn damn!

I remember thinking about a week ago that Berkshire was in perfect position to move into the municipal bond insurance segment. It only made sense. Here's a company with $45B in cash that is looking for more cash generating businesses. Its primary line of business is insurance, specifically direct insurance on easily modeled quantities - autos (and now rental insurance, according to the Geico ads I heard on the radio recently), re-insurance, and probably some other things. No lives, no health, nothing with too many variables, as if there products Berkshire insures currently don't have enough variables already. So the question for me became when does Berkshire start insuring munis. The monolines are getting their asses kicked, he's got cash and is looking to both put what he has to use and generate more, and he already has the big brains on staff to model the products. It was a natural product line extension.

And here it is.

And you didn't hear it here first.


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