Thursday, January 21, 2010

Credit risk rising?

The TED spread is basing....look what happened the last time it based like this:

Goldman beats estimates....why are they down 5% and their CDS cost are up 21% on the day? Doesn't sound to me like they are doing so good.

According to Forbes:
"The investment bank crushed earnings estimates at $8.20 per share."
Zerohedge has a different story....
"Goldman Credit Default Swaps have surged by over 20% on the day the firm may have finally lost its trading "edge." With a 5% decline in the stock, the company default risk has jumped to a 5 month high at 121 bps."
Point being...risk is still high, the system is broken, and you had better be careful going long equities at this point.

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