A question to the wise reguarding 42 dollar book value and net asset value of their
Rolling forward past experience probably has the effect of understating reserves as most people think state and local governments have problems with unbooked (pension and medical) liabilities that will lead to distress in the future. How much is hard to say.
$25 GAAP book value is certainly more reflective of value than the $47 adjusted book value they throw out there. I tend to agree with Moody's downgrade and like the fact that they are not relying on models incorporating past experience as that sort of approach sure hasn't worked in the past. Still, you have to have some sort of basis and if AGO deserves a downgrade, I sure hope they will be consistent and downgrade wide swaths of municipal finance.