Tuesday, October 4, 2011

Someone is Betting Morgan Stanley is About to Implode

MS' CDS is looking downright brutal this morning- as spreads have blown out past 825, up over 100 basis points from yesterday, and greater than a 300 basis point increase from last Friday!
(A CDS of 825 means that it costs $825,000 per year for 5 years to insure $10 Million in debt)

MS' CDS going exponential indicates the market is now anticipating and pricing in an imminent need to payout those owning MS fire-insurance.
Can you say Deja-vu all over again?

Morgan Stanley Common Stock

Real Time 11.82 Down 0.65 (5.05%) 9:45AM EDT
Last Trade:11.82
Trade Time:9:30AM EDT
Change:Down 0.65 (5.05%)
Prev Close:12.47

Reuters is reporting that
*Goldman Sachs' CDS are up 24 basis points to 403 this morning as well, the highest since Oct 2008 right after Lehman
*Bank of America's CDS are up 37 basis points to a RECORD 490 basis points
*Citigroup's CDS are up 39 basis points to 388 basis points.