Bond insurer FGIC has asked regulators to break it up into two separate divisions/a>, one which insures minicipal bonds, and the other that insures the structured finance deals (aka the big sh$#pile).
This is likely a reflection of their dire position following Moody’s down grade of them from AAA to A3.
UBS is saying that banks are at risk of an additional $203 billion in losses from the bond insurance crisis.