It seems for now that AMBAC may win its fight to survive, unless a few muni defaults of AMBAC insured bonds bankrupts them. The insurer can at least rely on the long term premiums continued to be paid by all the municipalities it did insure thereby assuring them an annual maintenance stream. All that said, the insurance industry thrives on conservative stability. So why the AMBAC roller-coaster? Well muni rates are low, but their 3rd quarter results showed a capital gain and a higher stock price moved ( over 30% to $1.30). Then last week AMBAC announced the possibility of a bankruptcy filing. And a few days later it reported $856M of surplus easing concerns the bond insurer would fall short of statutory minimums. How all this can happen in two weeks seems anything but predictable. Some Wall Street analysts had speculated the insurer would come up short of $2 million in minimum capital needed under rules set up by its regulator. Then Ambac said it will receive a gain and plus the US government is bailing them out (and alot of other companies) with a $440 million tax refund because of recent legislation that will allow it to carry back 2008 and 2009 losses as far back as 2004.