Our exposure to Puerto Rico is real and recent developments increase the likelyhood of losses to MBI. Is MBI going away? NO. BUT were are in a messy situation that will be costly but no one knows what those costs will be. AND the mkt hates uncertainty so the sell off. Overdone? That depends on how it all shakes out.
Just be careful of the Cavalier statements that about mkt. makers shaking out the WEAK hands. There are plenty of reasons for the selling and those conspiracy people are just blowing their own horn!