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Credit Default Swaps Show A Decrease In The Fear Trade

By Total Trader | Published: 11 May 2009

Credit Default Swaps (or default risk) have really come in over the last week, and as shown below, an index of CDS prices for 125 investment grade North American debt broke its uptrend and key support in recent days.  A break of these key technical levels leaves plenty of room to run on the downside, which is a positive for the overall market.

Defaultrisk508 

Below we highlight the CDS prices for four big banks and brokers.  Default risk for these companies has also dropped significantly over the last few weeks.  CDS prices for Morgan Stanley and Goldman Sachs have really moved back to more normal trading levels, while Bank of America and Citigroup are down but still have a lot further to fall before anyone can say the coast is clear.

Mscgsbac

Source: Bespoken Research

Related Posts:

  1. United States loses prized AAA credit rating from S&P
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  3. Steelmaker’s default highlights overcapacity and impact of slowing economy
  4. Credit Suisse Global Investment Returns Yearbook 2013
  5. Emerging-market equities show leadership
  6. Have credit ratings lost their meaning?
  7. The Upshot: Fear vs. Fundamentals

This entry was posted in Market Reports and tagged American Debt, ASX, Bank Of America, Banks, Citigroup, Credit Default Swaps, Credit Risk, Default Risk, Global Stock Markets, Goldman Sachs, Investment Grade, Morgan Stanley, Share Price, Uptrend. Bookmark the permalink. Both comments and trackbacks are currently closed.
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