DealBook reports that MBIA Inc. (NYSE: MBI) is blaming short-seller William Ackman for its woes. And since it can't seem to fight Ackman by improving its financial condition and boosting its prospects, MBIA is asking Congress to step in.
When the producer for CNBC's Closing Bell with Maria Bartiromo called to ask if I'd talk about this topic at 4:15 this afternoon, I turned her down. I would have loved to have discussed this; however, I had a class to teach. But I have been a supporter of Ackman's call to short MBIA since last May. And the stock is down about 81% since then. What a great call on Ackman's part!
That's why MBIA's testimony in front of Congress is so pathetic. Specifically, it targeted Ackman when it wrote that the House Subcommittee on Capital Markets should work with the Securities and Exchange Commission to curtail "the unscrupulous and dangerous market manipulation activities of short sellers," trying to undermine market confidence in MBIA to drive the company's share price to nearly zero.
Perhaps if MBIA had stuck with insuring municipal bonds instead of branching out into fields it did not understand -- such as insuring Collateralized Debt Obligations (CDOs) and CDO-squared -- Ackman would have looked elsewhere for a short-sale profit.
MBIA made it's bed and soon it will be swimming with the fishes. And there's not a thing Congress can do about it.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
Happy holidays! Google giving away free Wi-Fi 
Dr. Doom Nouriel Roubini believes the bubble is about to burst
Cramer on BloggingStocks: Investors are rethinking their snap judgments 
