Accounting Errors Cause Plunge In VeriFone Shares The maker of electronic-payment equipment lost nearly half its market value in New York trading after accounting errors erased four-fifths of pretax profit for the first nine months of 2007.... Read Full Article U.S. Says Attacks In Iraq Fell To Feb. 2006 Level New U.S. military data showed that attacks had declined to the lowest level since January 2006. It is the third week in a row that attacks have been at this reduced level.... Read Full Article Le Grand Bouffe Well, I for one am exceptionally glad someone is stepping in to stomp out that foul language seen on Gordon Ramsay’s Kitchen Nightmares USA .... Read Full Article Kmart Items Marked Safe Had Lead Kmart said that it would remove all jewelry advertised as ?lead free? after it was found that some pieces contained high concentrations of the metal.... Read Full Article Tech Terms Dominate Word Awards For those who’ve been doing a spot of pod slurping, let it be known that your activity has gained more than cursory recognition.... Read Full Article |
Credit Crunch Contagion Has Bonds Cover At Record HighThe credit crunch, triggered last February by a surge in defaults on high-risk, sub-prime mortgages, appeared to have travelled right across the financial system yesterday, as it emerged that the cost of insuring even the most robust corporate bonds had reached a record high. The annual cost of insuring $10 million (£5 million) of bonds issued by a basket of 125 North American investment-grade companies against default, has soared from $80,970 at the start of the year to $152,000, it emerged yesterday. The basket is known as the Markit CDX North American Investment-Grade Index and includes McDonalds, Wal-Mart and AT&T bonds. In Europe, the nervousness about bond defaults appears to have increased even further. Since the start of the year, the annual cost of insuring a $10 million investment in the Markit iTraxx index of 125 investment grade European companies rose from €51,320 (£38,670) to €123,750 yesterday. The index includes bonds in Barclays, Diageo and Tesco. &&&§ionName=IndustrySectorsBankingFinance,mywindow,menubar=0,resizable=0,width=615,height=655); Related Links Fed cuts growth forecast because of downside risks MPC was unanimous in support for rate cutBond insurance is typically done through Credit Default Swaps (CDS), which guarantee the payment of interest and principal in the event of a default. In return, the insurer receives regular payments from the policyholder. One banker said that movement in the CDS market did not necessarily signal that the companies bonds underneath were any more likely to default or run into trouble. He said the CDS market is much more volatile than the bond market because hedge funds looking to short the market will tend to short the itraax index rather than shorting the underyling bonds themselves. “Its not always an indication of credit fundamentals. Its more about buy and sell demand,” he said, Another banker conceded that the CDS market had been “really awful this week”, but said there had been no particular event - such as a downgrading of corporate bonds by a credit ratings agency - to trigger bad news. Tag CloudExternal InformationAdditional InformationWorld Business Briefing | Asia: China: Citigroup Plans Expansion...Porn empire calls it a night... Your Ad Here, on My S.U.V.? And You?ll Pay?... Bank of Japan Leaves Key Rate Unchanged... Where Am I?News Main Page - Business - Credit Crunch Contagion Has Bonds Cover At Record High |
i8news.com |