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Observation: MBIA is forced to borrow at deep junk rates (14%) in a 7% environment (surplus notes have a slight premium). These notes then go on to trade at an immediate discount, yielding 20%.

Observation: MBIA had to reduce, then cut its dividend to preserve capital (they didn't even have a chance to pay out the reduced dividend).

Observation: MBIA has diluted there current shareholders by considerably over 50%, raising discounted equity capital in amounts that approach what was thier extant market capitalization. This was on top of the record cost of the debt offering, at least for a "AAA" company!

Obervation: MBIA has lost more then 80% of its equity value in less than a year. 

Observation: MBIA has recorded two historic and unprecedented losses, back to back, and foresee several more to come.

Observation: MBIA has written down to zero the interests in its captive reinsurer.

Observation: MBIA's captive reinsurer lost its AAA rating, cut to A-, thus forcing it swallow those risks.

Observation: MBIA as insured securities and structures with minimal loss history and nearly no legal precedent in how to handle conflicts during losses and liquidations, on an underlying of that is going through the biggest correction/bust in the history of this country's financial system.

Observation: MBIA now has competition from a better capitalized, cleaner, and arguably better managed competitor that is eating into its business at a rate as fast as 60 clients per day.

Observation: MBIA reinsures, and is reinsured by very small circle of entities whom concentrate very highly correlated risks using more than 80x leverage.

Observation: MBIA's insurance of leveraged loans and junk bond CDOs has not surfaced yet, but I'm pretty sure its there.

Final Observation and Conclusion: S&P has just affirmed the highest credit rating available to this company. This is a damn shame! This does not confirm the creditworthiness of MBIA, it devalues the meaning and worth of the AAA moniker. Shame on you S&P.