The following appeared in the August edition of Business Diary Botswana. Right now I find myself fascinated by the role that securitization and a mature credit derivatives market will ultimately play in frontier economies; as J.P. Morgan once penned, “credit derivatives allow even the most illiquid credit exposures to be transferred to the most efficient holders of that risk.” Despite its perils (notably the lack of respect issuers had for the potential correlation on mortgage defaults), it is my belief that the underlying concept supporting derivatives is a sound one if handled correctly. As wealth continues to flow to developing markets in the coming decades, so too will the management of risk continue to mature.

Back in late March, not long after the S&P registered its ominous 666 low, an understandably seething writer in The New York Times charged that above all, the “key promise” of

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MBIA Inc. (MBI) announced today that it has established a new U.S. public finance financial guarantee insurance company, giving the bond insurer a new entity dedicated exclusively to the U.S. public finance market. The move is part of the company's goal to separate its municipal business from its structured finance business.

Investors obviously liked the move as MBI is the best-performing S&P 500 company today, with shares surging 35%.

Specifically, MBI transferred stock of MBIA Insurance Corp. of Illinois to a newly established intermediate holding company dubbed National Public Finance Guarantee Corporation. It will operate as a subsidiary of MBIA Corp.

"We believe this new business model will not only preserve the interests of both our public finance and structured finance policyholders and enhance the value for our shareholders, but will benefit the U.S. public finance markets as well," stated MBI CEO Jay Brown.

While the surge in

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John DevaneyJohn Devaney | Hedge Fund ManagerA few days ago I read an odd article within the New York post on John Devaney and how he was supposedly booed off of stage at a recent conference. Click here to read this article now. This seemed far fetched but I figured anything could happen in today's market environment. Here is an excerpt:Devaney, who made no friends after his United Capital Markets' flame-out left investors with zero payout, began to speak during a Monday morning discussion at the conference but soon began a rant on why the markets were wrong and he was right.The crowd began to boo and the microphone was taken away from him, according to several spies in attendance. This morning Mr. Davaney is claiming that this story has been completely fabricated by a ...

The fundamental question in buying stocks is the expected earnings (or cash flow, depending upon the sector) compared to the stock price. One compares this to alternative choices like bonds or real estate or foreign markets. On a risk-adjusted basis, one’s asset allocation should favor the undervalued asset classes.

At “A Dash” we believe that U.S. equities, despite a multi-year, double-digit profit expansion, and some market reaction, still reflect intense investor skepticism about future earnings. The biggest cloud over the earnings picture is the continuing (and so far incorrect) forecast of a recession by bearish pundits, mostly non-economists.