A handy guide to possible impending doom.

Ambac: A few months ago, Ambac was the company that somehow managed to climb out of what looked like a certain and very rapid death spiral. The big insurer, which provides coverage to other financial institutions against the risk of their counterparties-like, say, Lehman-failing to meet their obligations, has had a tough year. Early this year, Ambac rejected a less-than-generous rescue offer from Warren Buffett.

Since then, a couple of things have changed. One is that the long-awaited collapse of major financial players is actually coming to pass. That's likely to leave insurers Ambac and MBIA exposed to those I-can't-believe-this-will-really-happen eventualities they insured against. (Ambac declined to comment for this story.) The other thing that's changed is that Bailout Bingo is looking like a more and more inauspicious avocation. Early this y

ear, Ambac looked as if it was Too Important To Fail. But that was before Lehman, also pretty important, failed. And before Fannie and Freddie, the very models of Too Big To Fail, got bailed out in a way that left their shareholders with zip. Right now, who gets bailed out and how is something that depends on Treasury Secretary Hank Paulson's mind and mood more than anything else, but any shareholders who think that Paulson will make them whole are dreaming.

Bonus Round: No, an implosion at Bank of America is not in the cards: the huge dreadnought of a bank can certainly take a lot of damage and still stay solvent. But Ken Lewis seems to have decided to take on a near quasi-government role in buying up deeply troubled institutions: first Countrywide, the nation's biggest mortgage lender, and now Merrill Lynch. Maybe he sees something that other people don't, but buying companies with unquantifiable and potentially almost bottomless liabilities is a high-risk way to grow. How big could the damage be? Big.

(Editor's note: Since this story was initially published on the morning of September 17, both Washington Mutual and Wachovia have made movements toward a sale or merger.)

Karim Bardeesy contributed reporting to this story.

(Photo of dominoes from legacycreative/gettyimages)