22 July 2008

One of the Remaing Bond Insurers Implodes As Hank Paints the Tape

And so we have a pathetically obvious intervention in the markets today to help to curb the declines in shares and bolster the dollar as banks declare more losses and one of the few remaining bond insurers implodes.

What would the penalty be for dynamiting bridges used by the public evacuating the shore areas from the approach of an incoming tsunami?

The market intervention 'for the good of the public' is being used to further line the pockets of the Wall Street wiseguys. Its a dirty business.

Assured Guaranty Plunges, Bond Risk Soars on Review
By Christine Richard and Shannon D. Harrington
July 22, 2008 11:11 EDT

July 22 Bloomberg -- Assured Guaranty Ltd., one of two bond insurers with a AAA ranking from the three major ratings companies, fell as much as 58 percent in New York trading after Moody's Investors Service said it may downgrade the firm.

The cost to protect against a default by Assured Guaranty soared to a record. Credit-default swaps on Financial Security Assurance Holdings Ltd., the unit of Europe's Dexia SA that was also placed under scrutiny by Moody's, also rose to a record.

Moody's review is a blow to Hamilton, Bermuda-based Assured Assured Guaranty and Financial Security of New York, the only two bond insurers to maintain their top ratings as losses in the industry crippled competitors. The companies are dominating new municipal bond insurance and seeking to fend off Warren Buffett, whose new bond insurer was awarded a Aaa rating. Without a Aaa stamp, former market leaders MBIA Inc. and Ambac Financial Group Inc., have seen their new business plunge.

``Potentially all the legacy companies are gone now,'' said Rob Haines, an analyst with CreditSights in New York. ``It has huge implications for the municipal bond market and for banks that may have to take another round of writedowns. It's just a mess.''

Assured Guaranty fell $9.45, or 50 percent, to $9.30 as of 10:45 a.m. in New York Stock Exchange composite trading after Moody's said late yesterday it's reviewing the financial strength ratings of the companies, which had avoided ratings reviews while five competitors lost their top rankings this year because of escalating losses on securities linked to U.S. home loans....