Credit Insurance Soars At Wachovia

Discussion in 'Stocks' started by Retired, Sep 27, 2008.

  1. Retired

    Retired

    FOLLOWING WAMU COLLAPSE, WACHOVIA UNDER THE GUN
    The cost of insuring the credit instruments at Wachovia (WB) got just a little pricier in the wake of the collapse of rival Washington Mutual and the government’s failure to reach an agreement on a bailout of the financial services business. How much pricier? Put it this way - what Wachovia paid $670,000 for yesterday costs nearly $3 million today. Or about three and a half times more. The cost of protecting $10 million of Wachovia credit soared to 24.5 percentage points upfront, plus 500 basis points per year, from about $670,000 a year on Thursday. Wachovia’s recovery has been hamstrung by the bank’s troubled mortgage portfolio, which included some $122 billion of adjustable rate mortgages that are considered among the least-liquid securities in the credit markets. Shares have slumped as much as 15% in Friday’s trading amid widespread worries that Wachovia could find itself among the ranks of banks considered susceptible to failure.

    http://blogs.barrons.com/stockstowatchtoday/2008/09/26/credit-insurance-soars-at-wachovia/
     
  2. Wow, so 18% of the bailout goes to WB? Oh yeah, this will work...
     
  3. lol :p

    an even bigger joke is citi is looking to buy wb. That's like 2 drunk trying to hold each other up...