Ackman vs. the bond insurers

William Ackman has taken the bold step of publishing what he calls an "open source model" of the bond insurance industry on the Internet. Basically, it allows people--and regulators--to model the industry based on various assumptions. Ackman's own view is sanguine. He is shorting both Ambac and MBIA and says both will face larger losses ahead. The move ostensibly is to give regulators a way to more accurately assess the insurers, breaking the dependence on "opaque, faith-based pronouncements' from the industry. The model aims, among other things, to provide a more complete look at CDO exposure. Indeed, the model specifically accounts for all CDOs with ABS exposure and CDO^2 exposure by name of security. This is a novel PR tack but not one without benefit to investors and regulators.  

For more:
- here's his letter to regulators via the Financial Times
- here's his model