(Update includes closing stock prices, volume)



) --


(MBI) - Get Report




, the bond insurers that rode the boom and bust of securitization, were surging ahead Tuesday on heavy volume.

MBIA shares closed up 21.9% to $8.24, breaking the $8 threshold for the first time this year. Ambac shares closed up 13.9% to $1.88, just shy of their high for the year of $2.09, which they touched briefly May 11. Volume for both stocks was more than six times their three-month daily average.

The volume spikes Tuesday came despite no readily apparent news to move the stocks. An MBIA spokesman declined to comment, and a call to Ambac was not returned.

MBIA and Ambac used to be sleepy insurance companies that guaranteed the debt of municipalities and other relatively low-risk borrowers. However, they got caught up in the securitization boom, insuring pools of both prime and subprime mortgages underwritten by banks like


(C) - Get Report


Bank of America

(BAC) - Get Report


JPMorgan Chase

(JPM) - Get Report

and given overly rosy ratings by

Moody's Investors Service

(MCO) - Get Report

TheStreet Recommends

and Standard & Poor's, a unit of

The McGraw Hill Companies



Now the insurers, known as monolines, have massive claims to pay out and there are serious questions about whether they have enough capital and earnings potential to make even those payments. Even if they can accomplish that feat, they have further obligations to their lenders and bondholders before there's anything left for shareholders.

Rob Haines, an analyst with bond research firm


, sees little hope for shareholders in these companies barring some type of government rescue.

"I think the equity will be wiped out as losses overwhelm capital and force regulators to seize them," he said.

Still, like many other highly troubled financials (as

Jim Cramer

points out on RealMoney), including

Fannie Mae


Freddie Mac



(AIG) - Get Report

, they have ridden a wave of speculation that is now more than a month old.


Written by Dan Freed in New York