Credit Insurance Soars At Wachovia

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

  1. Retired


    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.
  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...