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In light of Standard & Poor’s subprime risk model adjustment yesterday, bond insurers Ambac and MBIA had a tough trading day. Ambac was down 39 per cent, and MBIA down 17 per cent.
Shares in both fell once more.

Hopes were high that MBIA’s triple A rating would be affirmed after the monoline succeeded in raising $1bn in emergency capital last week. Ambac too, looked set to meet requirements with its own $1bn surplus note placement.

Although Fitch did affirm ratings for MBIA, S&P and Moody’s were more cautious. Moody’s placed Ambac on review for possible downgrade yesterday. Standard & Poor’s haven’t made the move yet, but it’s all but guaranteed that they’ll do the same.

Here on Bloomberg TV, (HT Carlomagno) is Bill Ackman of Pershing Square - the fund who are making a killing shorting the monolines:

And here, in more detail, are the Pershing Square presentations to investors:

How to Save the  Bond Insurers
Who’s Holding the  Bag?
Is MBIA Triple  A?