The risks of default by MBIA and Ambac have gone through the roof, and Ambac is in danger of losing it’s AAA rating, which could hasten a collapse by making capital harder to raise.

As to the significance? Atrios nails it when he says:

Ambac and MBIA are the two Jenga pieces which will pull the whole sh#@pile down. They insure all of the sh#@pile, allowing everyone to pretend that all of the risky stuff they own isn’t risky at all. But that insurance is most likely a complete fantasy as it seems Ambac and MBIA don’t have the cash to pay out claims. I should’ve gotten into the bond insurance business. Lower their ratings, you destroy their businesses. More than that, you wipe out the insurance fantasy, forcing everyone who insured with them to admit they have all this risky stuff on the books. Recognizing, of course, that in this context “risky” is just a euphemism for “sh#@ty.”