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I'm going to spend some time addressing this today, Tuesday. I've been offline for much of Monday. Basically, many of the positions should have been unwound from Ambac, although I doubt that they have. The more telling issue is that ABK's BK was a matter of simple fundamentals, which the market has forgotten to trade off of these days. The forces that drove Ambac into BK, are there for MBIA, Fannie and Freddie Mac as well as the big banks. There is not enough capital in the system to cover the losses. Fannie, Freddie and AIG have sucked up c.$500 billion in just aid! The hole is deep and wide, yet the fundamentals have been ignored. From what I have heard (I was away from a quote screen) ABK's share prices didn't even move in tune with the BK announcement until after the market close.