Here is a great post from Do the right thing S&P and Moody’s that gives some straight talk about the monoline insurance business. It offers some refreshing opinions on what is going on here. I don’t agree with everything the blogger says, but he seems to be spot for most things. If you’re having trouble reading it, simply highlight the text, as it is somewhat dark in places.
Welcome to the new Monoline Insurance News blog. In this blog I hope to stay on top of and track issues key to the monoline insurance industry and the municipal bond market. A monoline insurer is simple a company that guarantees payment of a bond principal and interest when a issuer defaults. Mostly known in municipal bond markets, many municipalities have used the monolines to decrease the percentage on their issue, increase the credit ranking (AA, AAA etc). Some of the earliest and greatest monoline insurance companies are now in trouble. Most notably, the first monline, Ambac Financial (NYSE: ABK) and the other industry elder MBIA Insurance (NYSE: MBI).
Since the monolines are so important to the municipal bond industry, in which many Americans find tax-free security in their portfolios, I hope to pay special attention to this issue. Also, of course, this tends to be on everyone’s minds at the moment.
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