Human capital. The is the same excuse the Enron exec said on Larry King. A company is only as good as it can generate revenues and control expenses. Putting electricity on the wire at the cheapest rate. Human capital, is overated it is the balance sheet that counts. Any human thats thinks he is so valuable is probably conservative and to the right, and probably best to get rid of.
While interest rates are down, you will continue to get refis on the portfolio. Thus the value of the io strips will be less. However, this also means that ABFI will be doing more business doing refis. The write-downs will continue, but they are not a sign of bad business or management. If interest rates go up on the 10 year, you will have less of the refi going on and the value of the strips will remain constant or go up along with the value of their mortgage servicing.