The Einhorn Agenda I

Yesterday’s containment of the housing-originated credit-related implosion on various bond insurers—MBIA, down 8.2 percent; Ambac, down 13.8 percent; beaten-down MGIC Investment Corp, down 9.3 percent; and the already severely beaten-down Radian Group spitting up almost 25 percent, as a random sampling—probably made for a very big day for hedge fund Greenlight Capital Inc and its founder and principal David Einhorn.

A long-time critic of the niche, and short-seller of its participants, Einhorn laid out a cogent analysis of a number of the structural issues underlying credit markets last Friday, Oct. 19, when he spoke at  the 17th Annual Graham & Dodd Breakfast, sponsored by Columbia University’s Helbrunn Center for Graham & Dodd Investing.

While Einhorn is unquestionably talking both his trading book, and ‘Fooling Some of The People All of the Time,’ coming to an Amazon near you next spring, his speech is just as unquestionably worth the time-sink of reading its 8½ close-typed pages. Regrettably, no observations on hs recent finger-scorching when an activist run at New Century Financial succeeded, and he was appointed to the board, just in time for the ship to hit the rock of the consequences of lending money to people who can’t afford to pay it back.

A couple of key quotes follow, just to whet your appetite.

David Einhorn: Prepared Remarks
17th Annual Graham & Dodd Breakfast
Helbrunn Center for Graham & Dodd Investing
Oct. 19 2007

(Foreluck tug: Kevin Depew, Minyanville)

Comments

[Christopher]

Spellcheck? Heilbrunn Center, named for the philanthropist Robert Heilbrunn. With an "i" in the first syllable.

http://www1.gsb.columbia.edu/valueinvesting/

There seems to have been a misprint at the top of the speech text you've posted, although the spelling is consistent everyplace else I've checked.

Don't mind me, I get obsessive about these things.

[Justin]

I hope he put his money where his mouth was on NYSE:ABK, no matter what morgan stanley cynically concluded. It plunged today as the idea that it is actually not technically liquid started to sink in:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSnCigoprfyk&refer=home