Thursday, October 09, 2008


Today's rumor is that something BIG is going to happen tomorrow.

Maybe Lehman's CDSs will only fetch $0.10 on the dollar. Maybe MetLife has issues? Or Morgan Stanley?

it's lehman. tomorrow the bonds settle out a about 10 cents. 400bn in CDS's on lehman debt. someone is getting a $360bn beating. coincidence that suddenly AIG needs another 37bn, doubt it. MS, MS, and the whole insurance complex likely victims. piles of hedge funds as well.
CR has Krugman saying:
Stock prices are, however, the least of our worries. The money markets are [still !!] frozen; the TED spread is 4.14%. (CR: now 4.23 9:00 AM - 4.46...)

G7 meeting tomorrow, IMF-World Bank over the weekend. Now is the time for major action — an announcement of coordinated capital injections, liquidity measures, and more. If we’ve had nothing except vague assurances by Monday ...
and finally, from "You Cannot Patch a Busted Dam With Water":
One of the reasons central bankers panicked into mass rate cuts is a huge mass of adjustable rate mortgages is about to reset. The rate cuts were a big attempt to force down LIBOR...

Rate cuts failed big time to stem the surge in LIBOR.
Dow 5000 anyone?

Update: What do you know? GSIG is holding up... (or not).

Update: Oh, and: "International Trade Seizing Up Due to Banking Crisis (Updated)"


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