An institutional investor passed along these initial estimates of the damage that the Street will take from the downgrade of MBIA and Ambac, Bear in mind that these presumably do not become operative until Moody’s joins S&P in deeming both concerns’ insurance subs to be AA.
These loss forecasts are only those to banks and brokerage firms, and exclude any impact on smaller financial institutions or investors such as pension funds holding paper guaranteed by the two monolines:
I received a note today putting exposure within the banks at $600 billion. Barclay’s is estimating losses of $143 billion on a markdown—I think Moody’s has to follow suit for it to kick in at that level—UBS puts it at $203 billion, and Oppenheimer says Citi, Merrill, and UBS will write down somewhere between $40 and 70 billion among the three of them—a wide spread, I agree.
Anonymous 
Posts
I doubt the writedowns are large from the banks. The FED however, may have to write down a lot. Wait, is the FED subject to GAAP? Probably not.