Ambac Financial Group Inc (AMBC)

[CrocHntr]

Moody's - I think if they were going to downgrade, they would have done it by now. With all the pressure from the FED coupled with the fact that the ratings agencies are coming under increased scrutiny, Moody's best interest is to wait a bit before making a decision on ABK. Another rash downgrade before they know the extent of the bailout package and its affect on bond insurers would again send the markets into panic. It would be an irresponsible act, and would end up decreasing the relevance of Moody's (to the point that their business is in jeopardy). No, Moody's only choice is to hold off on a ratings change until there is a clear picture of the effect of the bailout and the role of bond insurers in the "recovery plan". We should find out more about this on Tuesday/Wednesday as the plan is pitched to the Fed.