Ambac: A surprisingly liquid after-market
Ambac looks like toast. The downgrade gives them a massive and immediate liquidity call - and whilst I believe the insurance company will be ultimately solvent I express no such thing about the parent company.
I believe it is in the interests of the insurance commissioner to let money out of the insurance company to bail out the holding company. But I have no assurance that the commissioner would do such a thing.
I sold - the last of my holding in the after-market.
The after-market was VERY liquid. Surprisingly so. So much so I am wondering whether someone knew more than me...
I guess I find out tonight my time.
John Hempton