Tuesday, July 15, 2008

US Bank Default Risk Rises; European Bank Default Risk Falls

As global financial stocks have fallen significantly over the last week, you would think default risk has risen as well. However, while default risk has risen significantly for US banks and brokers, it has actually fallen for the European firms. Below we highlight a table of the percent change in equities and default risk over the last week for 15 global financial firms. As shown, Lehman's default risk has risen the most, followed by Wachovia, Washington Mutual, Merrill Lynch and Morgan Stanley. On the other hand, it has fallen 18.68% for Deutsche Bank, 16.85% for Credit Suisse, 13% for UBS, 10% for HSBC, and 3.5% for Barclays. At least things are calming down somewhere.

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.