"Fears over next victims of squeeze," reads the headline in the FT last night. And there is plenty to be fearful about.
As my last Spine suggested and several Spines weeks before that (and the FT specifies), investor worries should be "mounting that the next big casualties from the credit squeeze might be the specialist companies that act as guarantors for bond issuers." The largest of these and the most phony is MBIA whose triple AAA ratings of bonds for schools, prisons, bridges, courthouses etc. are paid for by those who float them.
So "Standard & Poor's said it was now reviewing new date on bond insurers to determine the companies' ability to weather any further sumprime-related storms." This will cause a tsunami. MBIA, Ambac, Radian and others rate and then reinsure the insurers. Sloppy...even crooked.