Skip to content

Contagion Risk for US Banks

The European crisis has spread quickly over the last few weeks to global markets.  The S&P 500 shaved 2.85% today and closed at its 52 week lows.  The bigger news is that US banks have become a larger target of exposure rumors.  Morgan Stanley has quickly grabbed the headlines with a fervor that trumps Bank of America:

US Bank credit spreads at crisis levels

To put Morgan Stanley’s credit spread in perspective, it is now wider than Italian banks.  These spread levels indicate collapsing confidence in the US banking system that can become a self-fulfilling prophecy.  With equity markets down so sharply and financial institutions in the gun sights again, I can only imagine that the Fed and the Treasury are looking at a new plan to calm the markets.  The last thing that we need is the global financial crisis redux.

Posted in Markets, Politics.

Tagged with , , , , .

Copyright © 2009-2013 SurlyTrader DISCLAIMER The commentary on this blog is not meant to be taken as an investment advice. The author is not a registered investment adviser. There is no substitute for your own due diligence. Please be aware that investing is inherently a risky business and if you chose to follow any of the advice on this site, then you are accepting the risks associated with that investment. The Author may have also taken positions in the stocks or investments that are being discussed and the author may change his position at any time without warning.

Yellow Pages for USA and Canada SurlyTrader - Blogged