Why isn't Warren stomping on the monolines?

Bloomberg reports that MBIA is falling again:

MBIA Inc., the giant bond insurer hobbled by the collapse of the subprime market, will cut its dividend 62 percent and raise $1 billion in a sale of notes to boost capital and preserve its AAA credit rating.

The Armonk, New York-based company has declined 81 percent on the New York Stock Exchange in the past 12 months and fell 4.2 percent today after it reported fourth-quarter writedowns and expenses of about $4 billion related to mortgage securities.

Bizarrely Buffett may be willing to help, despite his interest in setting up a competitor:

``We're looking at multiple ways to participate in the industry,'' Ajit Jain, head of Berkshire's new bond insurer, said today in an interview. Berkshire, based in Omaha, Nebraska, is ``looking at ways to support the existing insurers in terms of reinsurance and capital,'' he said.

Part of the reason the monolines are in focus is, as Naked Capitalism reports, that Countrywide is rumoured to be close to bankruptcy. If it were to go down, it would trigger a wave of claims on the wraps the monolines have written that they likely could not pay. In this context, why doesn't Buffett just let his competitors go down? Or has it been gently suggested to him that it would be in the U.S. national interest if he used that spare cash to support the industry? Certainly the NYT's account of the support Buffett got for setting up his new monoline is bizarre. To pick some of the juicier bits:

Shortly before Thanksgiving, Eric R. Dinallo, the insurance regulator for New York State, did something unusual. He called Warren E. Buffett’s right-hand man on insurance, Ajit Jain, and suggested that he start a new company to insure municipal bonds in New York....

To be a New York company, Berkshire, with its main insurance offices in Stamford, Conn., would technically need to run its new business from offices in New York. But Mr. Dinallo agreed that Berkshire could set up a token office in New York and do most of its work in Connecticut...

For its part, Berkshire agreed to put up $105 million in capital to start, $30 million more than the minimum required by New York. But “to minimize the amount of capital trapped in the entity,” Mr. Jain said, Mr. Dinallo worked out a way for Berkshire to increase its leverage by permitting it to exceed the usual limits on reinsurance, or insurance on the risk the new company acquired.