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Warren Buffett said on CNBC this morning that his company, Berkshire Hathaway (NYSE: BRK.A) has offered to help bond insurers on the brink by offering a second level of insurance -- up to $800 billion -- on municipal bonds.

Buffett said he he made the offer to Ambac (NYSE: ABK), MBIA (NYSE: MBI) and FGIC.

The move will certainly put some wind in the sails of bulls who have taken a beat on Ambac and MBIA, but before you get too excited, consider that the Associated Press is reporting that the offer would only back municipal bonds and not other risky and complicated financial instruments.

Municipal bonds make up about two-thirds of the insurance industry's portfolio, with asset-backed securities making up the other third. But the asset-backed securities are probably the bigger concern.

It will be interesting to see if William Ackman, who has been vocally bearish on the industry for a long time, will have any comments on Buffett's offer.

Warren Buffett offers to reinsure $800 billion in municipal bonds originally appeared on BloggingStocks on Tue, 12 Feb 2008 08:52:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>ABKAmbacBerkshire HathawayBerkshireHathawayBRK.AFGICinthenewsMBIMBIAwarren buffettWarrenBuffettWilliam AckmanWilliamAckmanTue, 12 Feb 2008 08:52:00 EST