Heads up!

Here's a freakish headline that helps explain why regulators have been pushing for a breakup of monoline bond insurers: "Mortgage meltdown costs Orlando airport $12 million."

The Orlando Business Journal reports that downgrades of the airport authority's bond insurer, FGIC, due to losses on mortgage-related investments, has raised interest rates on bonds that are related to an expansion of the airport 20 years ago. Airports in Jacksonville, Denver, Atlanta and Washington D.C. are facing the same issue, the Journal reports.

Why do we care? Because to protect cities and local governments that depend on bond issues from experiencing the same kind of problems, regulators want bond insurers like FGIC to reorganize, separating their staid muni bond business from more risky guarantees of securities like collateralized debt obligations (CDOs) with exposure to mortgages. That could force banks into another round of write downs on such investments, worsening the credit crunch.

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