If MBIA (MBI, Ambac (ABK) or FGIC fail, it won’t be because the NYC Insurance Commissioner did not do all he could to assure their survival. Berkshire Hathaway (BRK.A) was a bidder for the book also.
I think those who are still short on MBIA or Ambac have seen the most of their gains. If the NYC Insurance Dept. has not moved to force actions from either company that would wipe out shareholders at this point, I don’t think one should be thinking they will.
Dinallo does make the point that while large, heavily populated municipalities may not need the bond insurers, there are “thousands” of small municipalities that do need it. It that sense, the business of both companies is still needed.
Disclosure (“none” means no position):
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