This is not a point in time to expect too much from AGO, by the "numbers". Management is the key element to watch as they combine FSA with their existing operation. The "candle" is burning on both ends; their Balance Sheet is under assult and maintaining a positive cash flow is going to be a challenge in this economic environment. Keeping the ratings agencies satisfied is also going to be a challenge.
The Dexia/FSA deal doesn't look as good as it did two months ago, but it should be a great deal if we can get some sort of help from economic conditions. The credit markets need to keep improving. I hope that investors soon turn away from Treasuries and start seeking higher yields in muni and corporate bonds. Mortgage backed securities need to show that the bottom is behind them. Yeeesh! We need to know the "bottom" is behind us on all levels. AGO could crumble if economic conditions continue to deteroriate at a log rate.