by Calculated Risk on 1/17/2008 03:38:00 PM

Reuters reports that S&P said today that they expect monoline insurer losses to be 20% higher than they forecast last month. See Reuters: S&P says bond insurance losses likely 20 pct higher (hat tip Michael)

More good news for the bond insurers.

This video of Cramer's comments is interesting.

Added: Excerpts from Standard & Poor's Press Release:

Standard & Poor's Ratings Services announced today that it has updated the results of its bond insurance stress test, originally published on Dec. 19, to incorporate the revised assumptions announced on Jan. 15 by Standard & Poor's RMBS surveillance group.

The new results show total projected losses for the industry to be 20% higher than those in the previous review. Individual company increases ranged from a low of 2% to a high of 36%. Standard & Poor's has not taken rating action on any company at this time.

The increased projected losses did not materially impair the adjusted capital cushions of the companies that had stable outlooks. For the other companies, the fact that their ratings either had a negative outlook or were on CreditWatch reflected uncertainty surrounding the potential for further mortgage market deterioration and the companies' ability to accurately gauge their ongoing additional capital needs. This latest round of revised assumptions is an example of the deterioration that was contemplated.
...
The revised assumptions announced by the RMBS surveillance group reflect the growing economic consensus that U.S. home price declines will be larger than previously forecasted and that the U.S. housing market slump may last far longer than previously expected. These factors, combined with the persistence of significant growth in seriously delinquent borrowers, are leading to upward revisions in loss expectations and a greater likelihood of the realization of these expectations. Specifically, the expected losses for the 2005, 2006, and 2007 vintages of subprime collateral have been revised to 8.5%, 18.8%, and 17.4%, respectively, levels meaningfully higher than the 5.75%, 15.5%, and 17.0% levels used in our December 2007 stress test.

Here are the companies ranked by percentage increase in S&P expected losses:
ACA 36% worse than expected in December.
CIFG 26%
Radian 26%
Ambac 22%
MBIA 11%
XLCA 10%
FSA 2%
AGC 2%