Bank and Broker Default Risk Soars
The following observation comes from Bespoke.
“As the scarecrows (‘if I only had a brain’) in Washington bicker over partisan politics, the life blood of our economy is no longer flowing. Each hour that passes that a deal doesn’t get done, a tick of GDP washes away. By the time legislation does get passed, too much damage could already have been done.
“Below we highlight the default risk of major banks and brokers through our CDS index. As shown, last week now looks like chump change compared to where levels currently stand. With the no short rule in place on equities, investors have clearly voiced their opinions through the credit default swap market. The proof is in the pudding, and unfortunately Congressional members are putting their parties over their country.You have premission to forward this to your elected officials!”
Source: Bespoke, September 26, 2008.
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