And Another Jenga Piece Comes Out

Who will get caught holding the bag?

Moody's Investors Service on Thursday stripped the insurance arms of Ambac Financial Group and MBIA of their AAA ratings, citing their impaired ability to raise capital and write new business.

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MBIA said Moody's action will give some holders of guaranteed investment contracts the right to terminate the contracts or to require that additional collateral be posted. The company said it has "more than sufficient" liquid assets to meet those requirements.