All these companies are still labouring under the illusion, maybe they have convinced themselves, that a recovery is coming and so they are all focused, not on winding down but on getting deeper in.

Ambac is a shadow of its former self. But the danger, I think, in not to do with their size but with how unstable everything around them is.

As I say, however, this is more a tidbit than major news.

I don't understand how significant the collapse of Ambac is. Considering they have been declining for 2 years, there has been plenty of time for the market to prepare for the inevitable and perhaps soften the blow with a pre-packaged bankruptcy deal.

Am I being hopelessly naive?