Monolines appear to be the primary target in the securitization market's game of mortgage loss speculation. Sources said that revisions to rating agency criteria for guarantors and the negative outlooks that resulted were the ugliest points in 2007 for these bond insurers.

But skepticism really began to snowball last May, after Pershing Square Capital Management's Bill Ackman gave a presentation - entitled Who's Holding the Bag? - that said financial guarantors, particularly MBIA, took on risky subprime investments without a sufficient amount of reserves to maintain their triple-A ratings.

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