Caught in the net

From Naked Capitalism:

Annual Premium as a Percent of Exposure:

MBIA 18 basis points
Ambac 21 basis points

Leverage (Net Debt Service Outstanding/Statutory Capital)

MBIA 147X
Ambac 143X

That speaks for itself I think.

Update. The testing times continue for the monolines. From Bloomberg:

New York-based Ambac dropped as much as 65 percent and Armonk, New York-based MBIA fell 38 percent after Moody's and S&P said late yesterday they are reviewing the rankings the companies depend on to sell bond insurance. Credit-default swaps on both guarantors rose to records, signifying investors see a growing chance that the companies won't be able to pay their debt.

Ambac, which yesterday cut its dividend and ousted its chief executive officer after reporting greater-than-expected write downs on the bonds it insures, said Moody's decision was ``surprising.''

Surprising as in we are surprised you finally worked out that we are leveraged up the kazoo? MBIA's surplus notes, despite their 14% coupon, are now trading at 84 cents on the dollar. And Bill Ackman thinks they will never pay a penny.