Bonds Unbound.(The Talk of the Town)(monoline insurers)

Publication: The New Yorker

Publication Date: 11-FEB-08

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COPYRIGHT 2008 All rights reserved. Reproduced by permission of The Condé Nast Publications Inc.

If the ongoing turmoil in the world's financial markets has made anything clear, it's that the list of things that can go wrong in those markets is a very long one. Month after month, it seems, another potentially disastrous problem rises to the surface. The latest looming crisis is the possible implosion of a group of companies called monoline insurers. If you haven't heard of monoline insurers, don't worry: until recently, few people, even on Wall Street, were all that interested in them. Yet their problems have become a serious threat to global markets. Rumors that monoline insurers, like M.B.I.A. and Ambac, were in serious trouble helped spark the vast market sell-off that prompted the Federal Reserve's interest-rate cut two weeks ago, and, only a few days later, rumors of a government-orchestrated bailout of these companies set off a...

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