S&P Ratings--I find the timing of the affirmation of the MBIA and Ambac AAA ratings as unusual. I have not seen an announcement confirming a bank bailout of Ambac, so why the rush? Was it a precondition to sealing the deal with the banks? I really wonder if we will ever know the terms of any deal. I also wonder if Fitch, which often tries to be out front and a maverick, whether they will go along with the parade. Maybe the banks decided they were going to end up paying either way, either all at once if the insurers failed, or slowly over time if they keep backstopping the payments due on defaulted CDOs. What I can't figure is why the banks are letting existing shareholders off the hook. Maybe they have to in order to keep the whole charade from falling apart. Let's face it, the market cap of MBIA and Ambac combined, even at the higher prices at the close today, just barely exceeds $3 billion. Small price to pay in order to avoid another $50 billion of writeoffs.
Tmcal
