Results 1 to 1 of 1
Thread Information
Users Browsing this Thread
There are currently 1 users browsing this thread. (0 members and 1 guests)
-
05-19-2010, 04:50 PM #1
- Join Date
- May 2007
- Location
- South West Florida (Behind friendly lines but still in Occupied Territory)
- Posts
- 117,696
Germany's Act of Desperation: Shock and Awe for Whom?
Wednesday, May 19, 2010
Germany's Act of Desperation: Shock and Awe for Whom?
Yesterday, Germany Banned Naked Short-Selling at Midnight and Politicians Declared War on the Markets. http://globaleconomicanalysis.blogspot. ... naked.html
Today, the markets responded with a shock and awe of their own. Please consider Swaps Soar on Germany’s ‘Act of Desperation’ http://www.bloomberg.com/apps/news?pid= ... %7Corder:3
Credit-default swaps soared as German Chancellor Angela Merkel’s curb on using the contracts to speculate on European sovereign debt sparked concern among investors about increasing government regulation.
The Markit iTraxx Crossover index of swaps on 50 European companies surged 50 basis points to 582, according to Markit Group Ltd., while the Markit iTraxx Asia index on investment- grade borrowers outside Japan climbed 10 basis points to 131.5, Royal Bank of Scotland Group Plc prices show. The jump in the indexes signals a deterioration in investor perceptions of credit quality.
Prohibiting speculation in the contracts may cause trading in swaps tied to Europe government bonds to freeze up, said Tim Backshall, the chief strategist at Credit Derivatives Research LLC in Walnut Creek, California. Trading limits may increase borrowing costs or limit the flow of capital, he said.
Sovereign CDS
Credit-default swaps on Europe’s most indebted governments fell initially on concern the restrictions on short-selling will devalue existing agreements. They erased those declines as it became clear Germany failed to persuade other nations to join in the ban. A Europe-wide prohibition on the practices is “doubtful,â€Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)
72 Hours Till Deadline: Durbin moves on Amnesty
04-28-2024, 02:18 PM in illegal immigration Announcements