Wednesday, January 30, 2008

Another big bond insurer in trouble

From Bloomberg:

"Jan. 30 (Bloomberg) -- Financial Guaranty Insurance Co., the world's fourth-largest bond insurer, lost its AAA credit rating at Fitch Ratings after missing a deadline to raise capital.

Financial Guaranty, a unit of New York-based FGIC Corp., was cut two levels to AA, New York-based Fitch said today in a statement. The company had been AAA since at least 1991. Moody's Investors Service and Standard & Poor's are also reevaluating their ratings."

Instead of the Fed cutting rates, and the Government and Treasury Dept. coming up with some half baked "stimulus" package, they just should have put a trillion aside to save these bond insurers. Other people can buy up the bank shares - but who has got the money to save these bond insurers? The panic is not going to stop, and the credit markets are not going to function until all this worthless paper is exposed.