MBIA, Inc. (MBI).  Shares have been crushed as it lost all credibility with its rating of bogus collateralized mortgage obligations. Now with its liquidity in question, and the loss of its coveted rating, the company is truly dead in the water.

Yesterday, MBI announced that it had sold $4 billion of assets in order to shore up its balance sheet. Will it be enough?  Can we believe the CEO when he states that liquidity is not a problem?

I do not think so.

Losing Sight of Visionary CEOs

One of the oddities of the current economic state is that a majority of publicly traded companies are run by managers who come from the accounting field or are strong with the numbers.

It is ironic then that this group should get the numbers so wrong.  As accountants, they rely so heavily on the numbers leading them to make statements regarding the certainty of their capital status.

The problem is that we have lost our visionary CEOs who are capable of seeing that the numbers may not be telling the entire story, see "If CEOs Could Change the World."  In fact, the whole thing may be a house of cards ready to collapse.

This is one negative consequence of the dot com crash.  The visionaries gave way to the accountants bringing us to where we are today.  We have no choice but to rely on the accountants to lead us out of this morass.

Unfortunately, I have little faith in this group of leadership and I would avoid stories like MBI as if it were the plague.

All is not well, today.  Wait for that true capitulation before going aggressively long in your portfolio.  That is my game plan for now.

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