Monday a bad choice of day to be away from the market

Times to treasure.

Fitch downgraded Ambac on Friday and the firm subsequently posted a $3.2B loss. This is the beginning of the end for the monolines, and the roughly $2T of bonds they have wrapped. The knock on effects in the muni market will be huge.

Then we had some equity market action: the DAX plummeted 7.2% and the CAC 40 fell 6.7%. The Hang Seng was down 5.5% and the FTSE was off 5.5% too with banks around the world particularly hard hit. The equity/credit realignment is starting to occur.

Finally BofA surprised with a $5.28B writedown, leaving net income down 95%. Still, it was at least positive.

Next, the FED goes cut crazy.