Here's where I am confused. If Ackman was buying credit default swaps based on an expectation that MBIA would go under, and he even _suspected_ that some of those swaps were being sold by MBIA, why did he keep buying? His counterparty risk is insane, right?
Ackman does make mistakes (big ones: he sold out of JCP this summer -- I'm not saying the sale was a mistake, mind you -- and his time frames on many of his earlier successful bets were way off and that cost him a lot), so it's possible this was a mistake. But he also understands the technical issues of these kinds of trades, which I really do not. I believe there was collateral involved -- but what was it? Wouldn't you kind of want to know? Altho asking that question is sort of getting a bit ahead of things.
I expect the mystery will be revealed in time. Also, wow, further evidence of lack of Adult Supervision in important activities.