Replies to post #167168 on SwingTrade Member Forum (SWING)

[BuzzOnDaBeach]

Goldman Sachs Group Inc.'s spreads widened to 3 percent, from 2 percent Friday, while Morgan Stanley's increased to 4.5 percent from 2.5 percent.

By contrast, Washington Mutual's spreads stood at about 20 percent on Monday afternoon, and AIG spreads widened to about 13 percent, Blum said.

When the spread or difference in yields on the swap and a government bond of comparable maturity widen, debt holders believe there is a greater chance of default. Last week, the cost to insure the debt of Seattle-based Washington Mutual rose to a point where investors essentially acknowledged it was more likely than not the bank would default.