RE: do the right thing, take the write down.It is also clear you do not understand insurance. Its not that ACA owes CM. If that is case the CDOs would be for sure be worth close to zero. But ACA merely was supplying insurance, which is now no good. That has nothing to do with the potential of the underlying security. Certainly, logic says CM will lose money of the $2B portfolio that was previously ACA insured. But unlikely to be zero as they represent senior tranches of mortgages. You would need house prices to fall by more than 50% for a chance to be zero.