If the bond insurers split into pieces in an attempt to save municipal bonds (like those issued by where you live) then Wall Street investment banks and the like will be forced to take more multi-billion dollar writedowns. Expect them to squeal like stuck pigs at the prospect of this happening. Ditto for shareholders in the companies. Expect lawsuits. Because no one is quite sure if the bond insurers can legally split into separate parts.
In the meantime, parts of the municipal bond market have frozen solid because no buyers exist. Would you buy a bond if you thought if might be downgraded shortly or be shown to have no insurance because the insurer is collapsing financially? Didn’t think so.
The Temptations have something to say to this, even if they said it 38 years ago.
Oh, great googalooga, can’t you hear me talking to you.
Just a ball of confusion.
Oh yeah, that’s what the world is today.
Woo, hey, hey.