Thursday, June 21, 2007

Bond Risk Rises on Concern Over Bear Stearns Hedge-Fund Losses

But i was told that the subprime problems were "contained" day in and day out...... with spreads everywhere close to lows this could help and reduce the unbelievable riks appetite that is out there...and this time maybe for longer than 2 weeks.....

Und mir hat man täglich erzählt das die probleme im Subprime segment isoliert sind.....nachdem immer noch alle Risikoaufschläge nahe historischen Tiefstständen notieren könnten die probleme im Hypothekenmarkt zumindest dazu beitragen etwas von dem unfassbaren Risikohunger aus den Märkten zunehmen (dieses Mal evtl. sogar dauerhaft)

The perceived risk of owning corporate bonds soared worldwide on concern over losses at hedge funds run by Bear Stearns Cos.

Credit-default swaps based on 10 million euros ($13 million) of debt included in the iTraxx Crossover Series 7 Index of 50 European companies jumped as much as 16,000 euros to 216,000 euros, the biggest one-day rise in three months, according to Deutsche Bank AG. The CDX Crossover index in New York surged as much as $10,000 to a nine-month high of $178,000. ....

Loans Index
The LCDX index of credit-default swaps on high-yield, high- risk loans fell for a ninth day, dropping 1.19 to 98.08, signaling a deterioration in the perception of the creditworthiness of the 100 U.S. borrowers included in the index. The LCDX is down 2.55 since May 22, when 13 Wall Street banks began offering the five-year contracts in the privately negotiated over-the-counter market.

As home-loan defaults rise, bondholders stand to lose as much as $75 billion of subprime-mortgage securities, according to an April estimate from Pacific Investment Management Co., manager of the world's largest bond fund. Investors in all mortgage bonds will probably take about $100 billion in losses, according to a March report from Citigroup Inc. bond analysts.

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