That's understood, but MBIA can't be a counterparty on a CDS where THEY are the reference entity. A CDS is a contract between X and Y regarding whether MBIA defaults on an obligation. Why would tightening of the MBIA CDS spreads affect them if they have no exposure to the contract?
idiocy, milsdegraaf, hman4292, thank you for taking the time to explain and educate me on the subject. Good luck in your investments. Perhaps after the release of the earnings we can discuss how this inpacted the results and how the managers explained it. Thanks again.