THE REAL "TRICKLE DOWN" EFFECT

The monoline insurers often pass on the risk to re-insurers. Now, those re-insurers are being affected by the Big ShitPile (© Atrios).

Ambac May Get $3 Billion in New Capital, Person Says (Update1)
By Erik Holm and Bryan Keogh
Feb. 23 (Bloomberg)

Reinsurer's Rating Cut

Channel Reinsurance Ltd., a reinsurer for MBIA, had its top Aaa credit rating cut by Moody's yesterday because of a slump in the value of residential mortgage securities.
The rating was cut three levels to Aa3 with a negative outlook, Moody's said in a statement. Channel Re provides more than half the reinsurance bought by MBIA, according to MBIA filings.