Thursday, December 30, 2010

JPMorgan (NYSE:JPM), Barclays (NYSE:BCS) Withdraw Lawsuit Against MBIA (NYSE:MBI)

Shares of MBIA (NYSE:MBI) got a big boost when JPMorgan (NYSE:JPM) and Barclays (NYSE:BCS) announced they're dropping their lawsuit against them concerning splitting its insurance unit in two.

While that's good news, and depending on whether it spreads to other banks like Bank of America (NYSE:BAC) and UBS (NYSE:UBS), among numerous others, it'll probably only provide a temporary boost for its share price, although it could hold if assumptions are made this is the beginning of the case against MBIA faltering.

The lawsuit centers around the splitting of the company resulting in the probability of getting paid on structured-finance policies being lessened. MBIA split their municipal bond insurance business from its structured-finance guarantees, which initiated the lawsuits against them.

MBIA closed Wednesday at $10.36, gaining $0.84, or 8.82 percent.

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