Bond insurers in deep

What a wild day in bond insurance land. The "AAA"-rated companies Ambac and MBIA are getting pummeled again on news Moody's Investors Service and Standard & Poor's are increasing their scrutiny of these firms. There just may, possibly, be something not quite as credit-worthy about the companies, in the opinion of the raters.

I can't imagine why they'd say that. I mean, it's not like MBIA just had to pay 14% interest to raise $1 billion in capital (my credit card rate, in case you're wondering, is 7.9%). It's not like Ambac just slashed the value of its credit derivatives portfolio by $5.4 billion pre-tax, or announced a "minor" quarterly per-share loss of almost $33 per share. It's not like they have exposure to all kinds of esoteric paper, rather than the low-risk municipal bonds that they insured for years and years. Oh wait ...