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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (30460)	2/15/2002 6:21:46 PM
From: LTK007	Read Replies (1) \| Respond to of 99280

Steve do you know anyway to access these insurance derivative spreads?? as these it seems are powerful predictors of future trouble in companies,well in advance of Moodys etc. <<In the wake of Enron, Kmart's Chapter 11 filing and the shocking accounting problems at Global Crossing, Tyco and others, there is an explosion of interest in the market for insuring against credit defaults. And nowadays even prime credits are getting harsh judgments in the derivatives market. General Electric Capital Corp. gets a triple-A credit rating from the credit-rating agencies, but even so, the cost of insuring GE's credit has tripled since early February. Now an insurance policy against default by the GE subsidiary over five years will cost you 34 basis points (34-hundredths of a percentage point) of your yield. "The market thinks its credit rating should be a low Aa rather than Aaa," says Sanjeev Gupta, head of credit derivatives at Credit Suisse First Boston. Other companies witnessing embarrassing rises in derivatives prices are Household Finance Corp., farm-equipment maker Deere & Co. and Countrywide Credit, a home mortgage lender.>>