Thursday, 6 November 2008

Ambac

I was asked last week if I could name any big stories that the mainstream financial press had missed, or covered poorly. I did not think I answered the question particularly well, and it has bugged me slightly ever since. So I am now checking!

And I’ve found an obvious one, or at least a candidate. Moody’s downgrade of financial insurer Ambac appears significant and deserving of much greater coverage and analysis than I have so far seen. Bloomberg has this brief article, Reuters output was nothing more than an abbreviated version of the Moody’s press release, while the FT ran only half the story – missing the point that Moody’s has downgraded all the bonds covered by Ambac.

The collapse of the monoline’s AAA ratings has been a steady and pretty grim tale, all through the year. It is having some large, and long-term impacts, particularly on US municipal borrowers, who will see their borrowing costs rise.

No comments: