Moody’s is affirming the current ratings and capital ratios at Ambac Financial Group, Inc. (NYSE: ABK), although there is not a downgrade being issued. Moody’s has noted that Ambac’s capital is currently under its "Aaa" target level and it would review the capital plans as the situation develops. If the company gets the bailout, it should get to sneak its "Aaa" rating.
We have noted before, as have many others, that this is a mere dance right now that is nothing short of a game to avoid a sudden financial collapse. It’s almost like the Treasury hiring out counterfeiters to print $1Trillion to put into circulation so that it doesn’t have to officially count the funds as being in the money supply.
We still think some of these mergers will be mandated rather than preferred. Is there a more appropriate day than Leap Day to put this out? Maybe April 1. The good news is that Ambac stock is now up on the day. Maybe stock buyers are getting to buy stock with that counterfeit money. We don’t want to see a market crash or a recession that turns into a depression either. But some serious games are being played in the system right now, and all the players know it.
Jon C. Ogg
February 29, 2008