I have combed their report. All things considered economically, management did a good job. Their operating results looked pretty good considering that investors are not buying any debt other than Treasuries. The RMBS write-downs are to be expected, residental real estate is still falling.
The important thing is they have cash flow and it is positive. The landscape is clear and AGO should be able to spring into action when the economy starts improving. With the FSA addition, they will have plenty of talented and hungry "boots on the ground" to cover the landscape once investors start piling out of Treasuries in search of higher yields. There has to be a lot of pent-up demand by the issuers of muni-bonds, they flat need the money.
Bond fund managers hate wrapped bonds, but the issuers love them. More important, if the issuers have a so-so credit rating, AGO can save them tons of money.
I think we just need housing to bottom and see investors that are willing to bet on something other than the super-safe (Treasuries).