NYtimes - Bond Insurer Plans a Split to Protect Ratings

Here is the link to New York Times story...

http://www.nytimes.com/2008/02/23/business/23bond.html

When Ambac is split up, should the credit rating agencies keep the AAA ratings on the CDO business. Absolutely not. Will this happen though? Absolutely not. It is well known that credit rating agencies generate business by providing "good" ratings to the loans and exotic instruments that banks invent. A little dishonesty can go a long way in this business.

The banks are infusing $3b to save almost $300b that Ambac insured. Isn't that a joke... Still the credit rating agencies will not downgrade the CDO business after Ambac is split... In fact the opposite will emerge and they will paint a rosy picture after they keep the AAA ratings on these instruments.

I also think SEC should investigate people on the news network channels. Friday's call on Ambac on CNBC looked like a rip-off of all the people who were shorting for some personal gains. There is no other explanation for this; entire days 200 point loss recovered in 1/2 an hour and that too on a Friday... difficult to chew ;-) And a breakup plan is reason to fear not cheer... Remember Buffet already made clear his intentions of cherry-picking the profitable muni business...