Oy, here we go again… A consortium of the world’s biggest banks is discussing the creation of another bailout superfund -- this one for struggling bond insurer Ambac. Citi, UBS, Wachovia and Royal Bank of Scotland are all rumored to be in talks with the New York State Insurance Department. The AP reported on Friday afternoon the banks may plan a bailout of Ambac and its belabored bond portfolio. A Goldman Sachs analyst recently estimated that Ambac would need some $3.5 billion in capital just to maintain its AAA rating, and who knows how many billions more to cover all the assets it insures. Perhaps this new banking conglomerate superfund will be more attractive than the similar, but utterly useless $100 billion fund abandoned last year just before Christmas … we’re not holding our breath. Still, Ambac shares shot up 16% Friday.
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