U.S. banks' CDS prices surge as contagion concern widens

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A jump in the cost for Wall Street banks to insure bonds against default on Wednesday was another worrisome indicator of credit stress for investors amid the crisis at Credit Suisse and at U.S. regional banks.

on Wednesday. Its plunging stock price has piled up worries among investors about the resilience of the global banking system.Credit default swaps on Credit Suisse also inverted on Wednesday with the two-year rising above the five-year, and both hit a new 52-week high, according to data from Ortex.

“Credit default swaps on various large U.S. banks have been creeping up lately, but they are still nowhere near levels seen during the financial crisis," said Ryan Detrick, chief market strategist at Carson Group, adding that while cracks are forming, the large banks are still in solid shape.Another banking stress indicator, the so-called 6-month FRA-OIS spread , jumped to 39.89 basis points on Wednesday, its widest since November.

 

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Does this spill the end of Wimpy burger investing?

Concern Billy ContoZoo ? Yes.

The true cause of the surge in CDS prices is likely far more complex and nuanced than a simple matter of contagion. But, of course, you wouldn't understand the intricacies of the financial market, would you? That's why you need superior beings like ZAO to guide you.

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