"You're only given a little spark of madness. You mustn't lose it"
Robin Williams

"Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement. ...The Company received a letter from JPMorgan Chase Bank, N.A. ("JPMorgan"), dated February 28, 2008, after failing to meet a margin call of approximately $28 million. The letter states that an Event of Default as defined under that certain Master Repurchase Agreement, dated as of August 3, 2006, as amended on February 7, 2007 by and between the Company and JPMorgan (the "Agreement") exists. The letter also notified the Company that JPMorgan will exercise its rights under the Agreement. The aggregate amount of proceeds lent to the Company under the Agreement was approximately $320 million. The Company's receipt of the notice of an event of default has triggered cross-defaults under all of the Company's other reverse repurchase agreements and its secured loan agreements. The Company's obligations under those agreements are material."

It's official now- TMA has defaulted on its loans and now not even Cramer can help them...This filing today is very significant for several reasons. First, it shows that the mess in the financial sector is nowhere close to being over, and that we still have many more lender bankruptcies that are likely to unfold in the next several months. And second, it also opens another avenue for the already troubled large cap banks to lose more money. I am not sure how much more loses Citi and Co could sustain before going back to the Middle Eastern well to ask for more capital. I guess now the "high single digits" prediction several pessimistic bloggers made for the embattled lender does not seem all that impossible :)

Few more quick notes on the financial sector- not many of them are good- Ambac's much expected bailout plan that caused the DOW to rally 200 points ( it's amazing how markets have been able to find silly reasons to rally recently) released today sounds simply like a joke:

Michael Callen, Chairman and CEO, commented on the offering, saying, "This capital raise, along with our recent strategic actions, our increased emphasis on risk-adjusted returns over the course of an economic cycle and a six-month suspension of the structured finance business, will strengthen our capital base. We expect to be better positioned to take advantage of the current favorable market environment for credit enhancement." He added, "In this offering, we are targeting our core investor base, the long term holders of our stock, who have been loyal to Ambac."

So they not only could not find anyone willing to commit to a fixed price offering with a decent price, but also diluted the existing stock holders 50%+, shut down a unit, and somehow now still miraculously plan "to take advantage of the favorable market environment for credit enhancement..."?? What a bazaar joke- I think these guys need to focus on making sure ABK does not follow TMA into BK, instead of putting out jokes worthy of Comedy Central...

By the way it is still a complete puzzle to me- how in the world could Moody and S&P give a company (MBI) a AAA debt rating if it has to pay 14% interest on its debt? What kind of Zimbabwenomics is that?

P.S. Now I need to end the day with on a generally bullish note- every single long position in my MSN portfolio has ended the day in green today - 18 stocks in total- :)

Stay safe and once again-short to hedge- better safe, than sorry...
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