In mid September 2008, America's big money boys no longer trusted each other to make good on their debts. Credit coverage soared to pay day loan rates. Rich men don't pay such rates, thus the government needed to bail them out. What happened after injecting over $350 billion in capital? Not much, Last week credit coverage soared for banks seen as "at risk". Reuters reported:
That's roughly half the CDS levels reached the week of September 15. However, the uptick is concerning. It portends another round of taxpayer sponsored corporafornication.
Since Tuesday, the CDS premium for Citi bonds rose 55% -- the annual cost of protecting $10 million of Citi debt against default for five years rose to $410,000 on Wednesday from $265,000 on Tuesday.
That's roughly half the CDS levels reached the week of September 15. However, the uptick is concerning. It portends another round of taxpayer sponsored corporafornication.
