Recent weakness is probably attributable to a report seen last night on Bloomberg that Moody's is reviewing Puerto Rico munis for possible downgrade to junk status.
Hasn't the market already priced in "junk." Do you know of any recent new issues? My understanding is that Puerto Rico has been borrowing from commercial banks rather than paying the high coupon the market would demand.
Some muni bond funds are precluded from owning anything but investment grade so a downgrade could have consequences in forcing out large blocks of bonds. There are a number of PR issues so not all of them would likely be affected.
If any of the things you mentioned were the reasons for MBI's weakness, I would think the PPS would have dropped drastically by a few points, but we are seeing a slow poisoning kind of weakness. I still think it's manipulation.
Dell, I agree with you. Although the above by "Wedbush" is complling, it cannot explain the recent downturn and the coincidence of the downturn with the Rescap Hearing conclusion.
I think Judge Glenn and company are tinkering with that $125 million- trying to figure out an allocation that is both fair, yet recognizes the additional effort of the two hold-out bondholders.
The shares have, in effect, been hijacked. Traders knew that Judge Glenn would be taking more than December 11th ONLY to close the case. Could they see all of "the book"? I don't know. But it would seem to me that buyers were holding off until the decision expected yesterday, and so the shorties took over several days ago, knowing full well that the buyers would not commit until the case closes.
So when is the case going to close? None of us know.