Ambac was downgraded

--4 step downgrades to Baa1 by Moodys --reasons: a.continuing loss on Mortgages debt b.worsening economy will create extreme stress c.diminishing business prospectus d.financial flexibility --operation results NI Q3 -2.4 bil vs Q3 07 -.36 bil vs -.823 bil due to a.Net mark-to-market losses on credit derivatives amounted to $2,705.2 million b.Net loss provisioning of $607.7 million was recorded for the quarter primarily relating to the second-lien RMBS insurance portfolio. 64 bil exposure to CDO, ~30% below IG. potential loss can be above 6 bil http://www.sec.gov/Archives/edgar/data/874501/000119312508173349/d10q.htm --I have epxresed my view before about AMBAC and MBIA - short --MBIA raised $2 bil equity capital in Q2 and current equity captial is around $2 bil, exposure to RMBS is around $33 bil. It might fare better than AMBAC. But worsening econmy might still drag down the company.