Ambac Posts $1.66 Billion in Losses

Ambac reported a net loss of $1.66 billion, or $11.69 a share, thus outsmarting all of those analysts who were expecting losses of about a third of that number. This is quite a feat by Ambac, considering that ABK was a $6 stock yesterday. I'm sure many companies wish they knew the secret to losing twice their market capitalization in one quarter and remaining in business. Since Ambac insures about $524 billion in bonds, this news should not be greeted with exuberance by the credit markets, although I would guess the credit markets were not expecting uplifting news out of Ambac. But can all the equity bulls who think the worst in the financial morass is behind us continue to ignore news like this?