All told, the insurers have $2.4 trillion in guarantees outstanding for municipal bonds and mortgage-related structured investments. It seems inevitable now that the ratings on all this paper will deflate. If Moody's decides that AMBAC deserves a non-investment grade rating rather than a Aaa rating, then much of the paper insured by AMBAC becomes junk debt. And junk bond debt is really what we are talking about here. While the ratings agencies might toy around with a progressive series of downgrades, the stock market has already decimated the shares of the monoline insurers, declaring them virtually bankrupt.