Global Credit Markets In Crisis Mode
* Nov 20: The cost of protecting corporate bonds from default surged to records around the world as the prospect of U.S. automakers filing for bankruptcy protection fueled concern of more bank losses and a deeper recession.
* Nov 19: - O/N LIBOR at 40bp;
- TED spread (3m LIBOR - T-bill): still above 210bp;
- 3m USD LIBOR - OIS: up again to 176;
- 3m EUR LIBOR - OIS: still at 166
* Nov 18: European CDS spreads in HY and IG previous record at 880 and 172; U.S. CDX IG hits record highs above 226bp; HY at record 1248bp
* FT Nov 12:The Federal Reserve and other central banks managed to drive down interest rates on short-term lending, but that is not bringing private money back into commercial-paper and money-market lending. Instead, private financial institutions are struggling to bolster their balance sheets and reduce leverage, effectively turning central banks into "lenders of sole resort."
* Nov 10 Calculated Risk: Thanks to heavy central bank interventions, credit and money market spreads have come down from their October highs but interbank lending rates as measure by LIBOR-OIS spreads remain too high amid little trading volume.
* Nov 10 BNP: Watch commercial paper, high yield spreads that refuse to recede.
* George Magnus: Deleveraging in the financial and householders sector will continue. As a result, four big battlegrounds remain. First, there is a high possibility of further bouts of financial stress and failures. Money markets are still broken and recovery will take time. Second, illiquidity, a preference for cash-type instruments, even over government bonds, and a considerably expanded supply of government bonds raise the threat of an untimely increase in bond yields. Third, the global recession that has started may yet turn out to be sharper than expected – and certainly longer. This will bring sustained, and some new, credit risks. Fourth, much slower growth and the risk of some home-made financial crises in emerging markets warrant close scrutiny.
* Roubini: To make the Wall Street rescue sustainable Main Street must be helped as well. The US government will need to implement a clear plan to reduce the face value of mortgages for distressed home owners and avoid a tsunami of foreclosures (as in the Great Depression HOLC and in my HOME proposal).
* cont.: A fiscal stimulus plan is essential to restore – on a sustained basis – the viability and solvency of many impaired financial institutions. If Main Street goes bust in the next six months rescuing in the short run Wall Street will still lead Wall Street to go bust again as the real economy implodes further.
* cont.: To do: 1) the federal government should have a plan to immediately spend in infrastructures and in new green technologies; 2) also unemployment benefits should be sharply increased together with a 3) targeted tax rebates only for lower income households at risk; and 4) federal block grants should be given to state and local government to boost their infrastructure spending (roads, sewer systems, etc.).
Nov 20, 2008
P/S Когда подъзаебу вас этой буржуинской шнягой так вежливо намекните мол вали на Х.. й и т.д.
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