i know quite a bit about munis. the recovery value ona city GO- in the very rare case of default- is usually 70% or better.
therefore, if AMBAC isnured 600MM chicago, and an extarordinary event happened and it defaulted, a worst case woudl be 200mm exposure. AMBAC has 7 billion in claims paying ability. it would be 6 monts earnings to cover the whole hit- so dont misunderstand the exposure or loss potential. detroit Unlimited tax GO's paid back 74 cents on the dollar as an exa