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After the closing bell sounded yesterday afternoon, MBIA (NYSE: MBI) stepped into the spotlight to report fourth-quarter earnings. The struggling banking firm saw its fourth-quarter loss shrink to $1.2 billion, or $5.30 per share from last year's fourth-quarter loss of $18.55 per share. This quarter's loss came courtesy of a $1.7-billion and a $532-million loss on insured derivatives. Both of these losses were logged pre-tax. The company's CEO Jay Brown blamed the rough 18-month period on the "worst credit crisis since the Great Depression." Last year was a rough year for MBIA, as the weak housing market lead to many homebuyers and homeowners defaulting on or lagging in their mortgage payments leading to a major problem for MBIA, which insures mortgage bonds. The problem for the banking firm is that the mortgage turmoil is expected to continue.
During the past year, shares of the banking firm have lost more than 80% -- and it doesn't look like the slump will end any time soon. The shares currently face resistance from their 50-week moving average, a trendline that has acted as a barrier throughout the equity's slump. Most recently, this trendline turned the stock away during its late-2008 rally attempt.
With the credit crisis deepening and with seemingly no end in sight, I wouldn't count on MBIA staging a major rally anytime soon.
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