prescient11

A Bank Led, Bank Insurer Bailout?!

I think this article is very simple and fails to see the forest for the trees, and no, the Florida analogy is not apropos. The author apparently fails to realize or ignores the fact that these insurers do not only insure CDOs and other sketchy financial instruments, but they also insure municipal bonds and other financial instruments that are very strong and will not fail. If ABK loses its AAA rating, then, in a very difficult credit environment already, institutions such as Citibank will be FORCED to dump excellent performing assets along with the bad stuff.

That would not be good for anyone. For most of the ABK insured assets, I'm sure Citi and the others are happy to hold them. Until someone can provide a breakdown of exactly how many questionable financial instruments ABK insured, and how many of these questionable instruments banks like Citi holds, as compared to their solid ABK insured assets such as municipal bonds, as a percentage of their total ABK insured assets, anybody trying to make a case that the banks are bailing out worthless assets is an idiot.