The talking heads may speak to a bottom in financials for the equity trading crowd, aka the patsies at the table, but the pros are betting that the outlook is quite gloomy.
Counterparty credit index weakest in three months
Tue Jun 24, 2008
12:42pm EDT
NEW YORK, June 24 (Reuters) - Concern about the counterparty risk of major investment banks jumped to the highest level in almost three months on Tuesday, as worries about the impact of bond insurer downgrades weighed on the market.
The CDR Counterparty Risk Index, which measures the average credit spread of the 15 largest credit derivative dealers, widened 6 basis points on Tuesday to 131.57 basis points, its weakest level since April 1, and 24 basis points wider on the week, according to Credit Derivatives Research, which manages the index.
Lehman Brothers was the weakest performer on the day, with its credit default swaps widening 13 basis points on Tuesday, according to CDR. Merrill Lynch's credit default swaps widened 12 basis points and ABN Amro widened 10 basis points, CDR said.
All banks included in the index were weaker on Tuesday, said Dave Klein, manager of indexes at CDR.
The counterparties included in the index are ABN Amro Bank, Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz), Barclays Bank Plc (BARC.L: Quote, Profile, Research, Stock Buzz), Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz), Credit Suisse Group (CSGN.VX: Quote, Profile, Research, Stock Buzz), Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz), Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), HSBC Bank Plc (HSBA.L: Quote, Profile, Research, Stock Buzz), Lehman, JPMorgan, Merrill Lynch, UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) and Wachovia Corp. (WB.N: Quote, Profile, Research, Stock Buzz)
Reporting by Karen Brettell; Editing by Leslie Adler
