News that Moody's Investors Service and Fitch Ratings are reviewing the AAA ratings of MBIA, Ambac Financial Group and five of their competitors has shaken the bond-insurance sector, in part because lower ratings would force a wide array of investors to sell securities. "We shudder to think of the ramifications. You have politicians, taxpayers, municipalities, states. It just opens up a Pandora's box. That is a huge destabilizing force," said Greg Peters, Morgan Stanley's head of credit strategy.

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