According to Bloomberg global corporate credit risk surged as concerns about accelerating subprime-mortgage losses caused investors to flee all but the safest assets.
Corporate bond risk rose to a two-year high in the U.S. and Europe, according to credit-default swap indexes that allow investors to speculate on the ability of companies to repay their debt or hedge against the risk they won't.
Indexes tied to the risk of owning high-yield, high-risk loans fell to records, suggesting demand is deteriorating for leveraged-buyout debt. Indexes of credit-default swaps on subprime mortgage bonds also plummeted to new lows.
The increase in risk is bad news for stocks. Especially financial stocks.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
1 comment:
I'm wondering if George agrees with Bill Gross' comments that the subprime mess may send the market down by 5 to 10%
Post a Comment