And many of the biggest names in the bond business are flashing warning signs.
FORBES: Is Your 529 College Plan Safe? Bond Managers Flash Warning Signals
It is dwarfed by even larger commercial banks, which have elbowed in on Lehman's historically strong bond business.
As a 35-year veteran of the bond business, Klotz knows all the tricks.
Meanwhile, somewhere out there, the tired James Bond business traveler, and all his traveling brothers and sisters, are dumping their electronic sending-and-receiving stations into yet another security-line bin.
Although the bond business isn't as lucrative, it is a viable alternative for Hong Kong-based Chinese investment banks, which lag behind their more established global peers in sectors such as asset management.
Precisely one year after his return as chief executive of MBIA, JayBrownJay Brown formalized his plan to separate the insurer's municipal bond business from the structured finance business that has given it so much trouble.
In stocks, more investment banks were out with improved earnings results, including Goldman Sachs (nyse: GS - news - people ), which posted better earnings off of strength in its bond business and more merger-and-acquisition deals, while Morgan Stanley (nyse: MWD - news - people ) also came in with better profits on fixed income.
Warren Buffet, who rushed into the bond insurance business during the financial crisis has since backed away.
They're looking for a way to rescue a little-known sector of the financial world called the bond insurance business.
The two biggest companies in the bond insurance business are MBIA (30, MBI) and Ambac Financial Group (22, ABK) .
It is common to wax nostalgic for a time when a man's word was his bond, business was done on a handshake, etc.
For example, when minority municipal underwriting firms gave political contributions in exchange for municipal bond underwriting business in the early 1990s, they were prosecuted.
FORBES: The Politics of Minority or Emerging Manager Programs (August 2, 2004 )
The bond insurers current distress did not arise from losses in their municipal bond insurance business, but rather from their venture into insuring CDOs and the like.
The two biggest companies in the bond insurance business are MBIA (30, MBI) and Ambac Financial Group (nyse: ABK - news - people ) (22, ABK) .
Bond insurance firms do business by guaranteeing payment on a bond.
Forging a meaningful business bond can take several meetings.
FORBES: Are You a Good Business Date? 4 Ways to Manage Expectations
What linked them, though, was not only a convivial aesthetic bond, but also a keen business acumen.
According to Tim Bond, of Barclays Capital, business profits rose (marginally) in real terms during the 1970s in both America and Britain.
But now they need new income streams following the decline in share sales, which together with bond sales and loan-advisory business account for the revenue banks make from the capital markets.
At the very least, fewer competitors in the business--and bond insurers would need to maintain the highest rating to stay in the game--would raise the cost of bond issuance for many smaller cities and make some projects too expensive to finance.
The boss of one European bank thinks the Basel rules will cause borrowers to move away from banks and into bond markets, boosting debt-origination business for some investment banks.
The most likely scenario is what regulators call "runoff, " where the bond insurer doesn't write new business and simply operates on the premiums earned from its existing book of business.
But it is near the bottom in business and tax climate and state bond ratings.
The triple-A rating is important because it allows the company to continue to attract new business, particularly in the municipal bond market.
Large exposures as insurers of troubled derivatives to their capital bases have raised questions about the bond insurers' ability to continue writing new business.
Another email cites a Bear Stearns executive as asking whether a particular bond sale was a "going out of business sale" and expressing a wish to "close this dog".
New tobacco companies, which by definition could not have participated in the decades-long scheme to convince smokers that the Surgeon General and their own doctors were lying to them, must post the equivalent of a bond to the states just to get into the business.
FORBES: Will The Compact Clause Trump The Tobacco Settlement?
The New York State insurance regulator, who said Thursday he continues to monitor the Ambac situation closely, invited other companies to open up for business to ensure that there would be bond insurers to go around in case any of the big ones fell apart.
Didn't it happen to most of American business in the 1980s, when the junk bond and LBO dealsters brought on a wave of downsizing?
This cascade of higher income taxes started in 2011 when Illinois, arguably the big state with the weakest economy, and the lowest bond ratings, raised income taxes by 66% and business taxes by 46%.
应用推荐