Repeat The 2nd Mantra
Repeat the 2nd mantra after the man behind the curtain: There is no spillover or bleed from US housing into the financial or banking system.
Last night global sell off: FTSE -3.15%; CAC -2.78%; DAX -2.4%; Brazil, Mexico, Argentina, Korea, Poland, Russia and Turkey all down 2 to 3%.
Risk premiums surged as Absolute Capital Group Ltd., an Australian hedge fund, suspended withdrawals from two funds after forecasting losses on U.S. subprime mortgages.
Chrysler and Alliance Boots Plc failed yesterday to find buyers for $20 billion of loans to pay for their buyouts, leaving banks holding the debt.
Wells Fargo is shuttering the division's subprime wholesale lending business, the business represented 1.6% of the bank's $397.6 billion in mortgage lending last year.
Cost of credit default swaps, used to bet on the ability of companies to repay debt, is the highest in more than two years. The U.S. benchmark CDX Investment Grade Index jumped $6,000 to $62,750.
Credit-default swaps on $10 M of Goldman Sachs Group bonds jumped as much as $18,000 to a record $85,000.
Bear Stearns credit swaps surged as much as $29,000 to $110,000; Lehman Brothers climbed as much as $24,000 to $104,000; JPMorgan Chase rose as much as $25,000 to $75,000.
Deutsche Bank, Germany's biggest bank, rose 9,000 euros to 35,000 euros, up from about 15,000 euros at the beginning of the month.
The CDX North America Investment Grade Index, tracking the credit risk of 125 U.S. investment grade companies, rose $8,000 to $64,750.
The LCDX index, tied to the speculative grade loans of 100 companies, dropped to its lowest since it started trading May 22, signaling an erosion of confidence in that market. It fell 0.9 to 93.7.
The CDX North America High Yield Index, a gauge of U.S. junk bond risk that falls as confidence erodes, dropped 0.88 to 92.
The price implies it costs about $497,000 to protect $10 million in junk bonds, up from $471,000 yesterday and approaching a record $517,000 in May 2005.
The ABX index tied to 20 subprime mortgage bonds rated AAA and created in the second half of last year dropped about 0.4 percent to about 94.13, according to a Goldman Sachs note to clients. The index has dropped 5% this month.
The 10 year interest rate swap spread, a gauge of what companies pay over benchmark lending rates, rose to 74.2 basis points, the highest since February 2002.
Repeat the 2nd mantra, there is no spillover or bleed from US housing into the financial or banking systems.
Last night global sell off: FTSE -3.15%; CAC -2.78%; DAX -2.4%; Brazil, Mexico, Argentina, Korea, Poland, Russia and Turkey all down 2 to 3%.
Risk premiums surged as Absolute Capital Group Ltd., an Australian hedge fund, suspended withdrawals from two funds after forecasting losses on U.S. subprime mortgages.
Chrysler and Alliance Boots Plc failed yesterday to find buyers for $20 billion of loans to pay for their buyouts, leaving banks holding the debt.
Wells Fargo is shuttering the division's subprime wholesale lending business, the business represented 1.6% of the bank's $397.6 billion in mortgage lending last year.
Cost of credit default swaps, used to bet on the ability of companies to repay debt, is the highest in more than two years. The U.S. benchmark CDX Investment Grade Index jumped $6,000 to $62,750.
Credit-default swaps on $10 M of Goldman Sachs Group bonds jumped as much as $18,000 to a record $85,000.
Bear Stearns credit swaps surged as much as $29,000 to $110,000; Lehman Brothers climbed as much as $24,000 to $104,000; JPMorgan Chase rose as much as $25,000 to $75,000.
Deutsche Bank, Germany's biggest bank, rose 9,000 euros to 35,000 euros, up from about 15,000 euros at the beginning of the month.
The CDX North America Investment Grade Index, tracking the credit risk of 125 U.S. investment grade companies, rose $8,000 to $64,750.
The LCDX index, tied to the speculative grade loans of 100 companies, dropped to its lowest since it started trading May 22, signaling an erosion of confidence in that market. It fell 0.9 to 93.7.
The CDX North America High Yield Index, a gauge of U.S. junk bond risk that falls as confidence erodes, dropped 0.88 to 92.
The price implies it costs about $497,000 to protect $10 million in junk bonds, up from $471,000 yesterday and approaching a record $517,000 in May 2005.
The ABX index tied to 20 subprime mortgage bonds rated AAA and created in the second half of last year dropped about 0.4 percent to about 94.13, according to a Goldman Sachs note to clients. The index has dropped 5% this month.
The 10 year interest rate swap spread, a gauge of what companies pay over benchmark lending rates, rose to 74.2 basis points, the highest since February 2002.
Repeat the 2nd mantra, there is no spillover or bleed from US housing into the financial or banking systems.
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