There's nothing magic about 2006, I just wanted a period which was clearly before structured finance risk started becoming a problem to show what muni underwriting was like during the "good times." We see 28% of the total par outstanding was in GO munis. I did some rough calculations and it comes out to something like 44% of muni underwriting was in GO's. Notice also what you see very little of: healthcare, housing, industrial development (zero). In other words, the riskier segments of the muni market are clearly under-represented.The point is to say that muni insurance was not typically used as a true credit enhancement, at least not in terms of avoiding default. By now you've heard the stellar record of GO bonds, which almost never default. So who needs the insurance?
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