The near implosion of bond insurers is a sad painful opera that is playing out as we speak. The level to which these companies have descended is awesome. MBIA shares are at their lowest point in a decade, MarketWatch notes. Ambac, at just under $2 a share, is down nearly 100 percent over the past year. Security Capital is trading at about a half dollar. It's hard to see how they will ever regain their past stature. Even regulators are vexed about what to do. The latest is that the insurers are in talks to unwind a lot of credit default swaps, according to the Financial Times. It's unclear how that will work exactly. The CDSs were issued to guarantee payments on CDOs. These hedges already caused some big losses at the likes of Citigroup and Merrill Lynch. This would presumably entail a fee to terminate the contract.  

For more:
- here's the Financial Times article

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