ABK, MBI Hot Stocks 8/28/08 Ambac, MBIA August 28th

On August 15th, I wrote about Ambac ( ABK ) when it was in the $5's. I stated it has resistance in the low $8's and it looks like we could test that by next week.

Ambac ( ABK ) and MBIA ( MBI ) are surging today after MBIA To Reinsure $184B Of FGIC's Municipal Bonds.

MBIA Inc. (MBI) said Wednesday it will reinsure a $184 billion portfolio of U.S. public finance bonds insured by the troubled Financial Guaranty Insurance Co.
The Armonk, N.Y., bond insurer will pay a ceding fee of about $197 million and will receive about $741 million in unearned premiums for reinsuring the municipal bonds.
Premiums are booked over the length of an insurance policy's coverage period, so an insurer would have earned only 50% of the premiums paid on a one-year policy six months into that coverage period.
The deal resulted from a competitive process overseen by the New York State Insurance Department, which must approve the specific details.

MBIA is up 34% to $16.05
Ambac is up 37.5% to $7.21