A mislead by Warren Buffet

There's no link. I'm just thinking here. We've been dissing the monoline insurers because they took their perfectly safe little racket -- insuring rock solid municipal bonds -- and ruined it by looking for the most enormous and highly correlated sort of bad investment possible, these AAA rated mortgage backed securities.

So, Warren Buffet says, "OK, I'll take the perfectly safe bit." And offers to reinsure the muni bonds.
But, I think he just did that to manipulate markets with his reputation. The food company securities play -- the other news he made recently -- seems legit, but he had to know he'd be rebuffed (Warren Rebuffet?) on the bond insurance front. And, where do cities get money? Property taxes. Which are on the one hand based on plummeting assessments. And on the other hand based on people not going into foreclosure and mailing their keys to the bank, who won't pay taxes until they sell.

So, revenues are bound to crash, especially in many of the new towns. Which needed new municipal features. Which were financed with bonds. Which get repaid with property tax. Which won't get collected.

AMBAC and FGIC can split up all they want. I'm not sure they have a good part left.