Traders Cooperative

[Painterguy1]

Credit Suisse comments on some of today's financial headlines : Credit Suisse notes that Financials continue to be under pressure in today's global trading sessions. Disappointment spread to other markets when expectations of a large capital infusion/bailout for one of the major bond-insurers (ABK) became instead only a plan to offer $1 bln in common stock and $500 mln worth of equity units. Another firm published a note which alluded that UBS likely sold a $24 bln portfolio of Alt-A mortgage backed securities in a "fire sale," and this drove down the stock to lows not seen since 2003. Carlyle Capital, which failed to meet its margin calls, and Thornburg Mortgage (TMA) both received notices of default. Short term lending continues to be under intense strain. The WSJ noted that the rate banks charge each other for short term funding remains at exorbitant levels. It can been observed in the rising premiums to purchase insurance against a bank default, and this is translating into higher rates in other areas of credit, including muni's, mortgages, and corporate debt. Firm says the credit crunch is morphing into a liquidity crunch where even well regarded, stable firms/govt entities with solid credit ratings are having to pay higher rates to attract capital because the liquidity isn't there.