With respect, it does not come down to subprime defaults any longer.  You do not understand the business, and should sell for that reason alone. 

They are under attack as financial institutions, and cannot afford even one minor downgrade.  They have no capital.  They have no plan B.  They are dead.  Period.  And after how one of them screwed the only investor to step up, do you think there will be a SWF to jump in?  Uh...no.  Why?!  Even existing policy holders will stop paying if they don't get enough from the exercise.  So the ongoing...we will earn our way out...does not look so good. 

Some of these guys will probably survive.  But I really think it will take governmental intervention and restructure to pull this mess out of the quick sand.  Not that I am advocating it, just saying how heroic the measures need to be to save this mess. 

Now I told you all to wait a bit longer, and why.  If you must foolishly invest with no visibility, at least put in with too big to fail Citigroup or some such.