This page has been archived and commenting is disabled.

Bank Of America CDS Now Offered At All Time Wides: Full Fin CDS Rerack

Tyler Durden's picture


And while stocks continue to blissfully exist in some parallel universe, the rout in financials has just entered overdrive, of particular note Bank of America, which has just passed it all time wides on the offered side. When the mid-market is north of 400, probably in about 2-3 hours, it may be time to cue the Lento from Chopin Piano Sonata, No. 2 in B-flat minor, Op. 35.

                   ~BANKS~         CHG                         
                  BAC   375/405   |+10|                       
                  Citi  240/260     |+10|                       
                  JPM   135/145   |+8  |                       
                  WFC   138/148  |+10|                       
                   ~BROKERS~       CHG                         
                  GS    268/278   |+8  |                       
                  MER   420/450  |+10|                       
                  MS    315/335   |+5  |  


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 08/23/2011 - 08:38 | 1589609 malikai
malikai's picture

Party HARD.

Tue, 08/23/2011 - 09:12 | 1589747 slaughterer
slaughterer's picture

Looks like another 2008-style fire sale scheduled for the NYFED this weekend. 

Tue, 08/23/2011 - 11:42 | 1590420 fx
fx's picture

The only ones making money on these absurd instruments called "CDS" are and will be the writers thereof - at least when it comes to CDS on the biggest and systemically important banks. Lehman failed, yes, and it exactly showed the governments and central banks what a hurricane followed/accompanied it. The powers that be will not let any of those banks go bk. Shareholders may get wiped out, even senior bondholders may receive some blows but rest assured cds holders will get nothing. Did you notice Greece? selective default, large rescue funds - no credit event. Heck, BAC and Co could make a ton of money by just selling each others' CDS  - billions of $$. Anybody buying these CDS is a complete fool, imho.

Oh and btw: the notion that the CBs are out of money compared to 2008 is a naive one, imho. They could print up as much money and temporary credit facilities as needed. They could grant unlimited liquidity and funding for years to come. Of course they are already leveraged to the hilt. So what? they could leverage up  many times more. The Fed, the ECB, the Boj or the PBoC certainly will never ever get a margin call, so the only real constraints are public opinion and potentially inflationary effects down the road. they will rather deal with those issues later than allow a banking melt-down. All those fears and panic moves in the CDS markets are overblown. 2 years from now the same people who right now rush into bank-CDS will be happy to sell them for a fraction of todays prices. watch and learn.

Tue, 08/23/2011 - 08:39 | 1589615 ZeroPower
ZeroPower's picture

Inverted CDS curve for BAC... 5yr "costs" more than the 10yr upfront.

We saw this in Greece as well.

Tue, 08/23/2011 - 08:52 | 1589674 Christobevii3
Christobevii3's picture

Can we just refer to this as the prolapse curve?

Tue, 08/23/2011 - 08:58 | 1589704 EscapeKey
EscapeKey's picture

As long as they don't pledge BAC shares as collateral for CDS written on BAC, I think we'll be alright.

Tue, 08/23/2011 - 08:39 | 1589617 hugovanderbubble
hugovanderbubble's picture


BAC and Unicredito

Worst CDS across all boards of big banks....


Tue, 08/23/2011 - 08:45 | 1589642 ZeroPower
ZeroPower's picture

? I sure hope youre not trading based on your facts.

Santander, Intesa, RBS, basically all Portguese baks.. all wider. Sub or SNR, take your pick.

Tue, 08/23/2011 - 08:48 | 1589654 hugovanderbubble
hugovanderbubble's picture

Look the CDS 2 yrs...the five year is irrelevant for a credit event. The 2yrs is the real key one to focus.




banks with > 10 mn euros market cap  worst 2 yrs cds.



Tue, 08/23/2011 - 09:10 | 1589746 ZeroPower
ZeroPower's picture

5yr is irrelevant for a credit event? Lol

Lets see, the most recent 5yr CDS is the most liquid and most relevant for any sort of comparisons to be made. Second, due to the roll, any desk which hedges their book (so, all MMs in CDS) will choose the 5yr for the very reason every other desk who needs to hedge, uses the 5yr. If you want to look at a diff maturity, look at the 10yr. But of course i assume you know duration risk is a lot more prevalent..

As for the constraints, thats fine, werent there in your earlier post.

Tue, 08/23/2011 - 08:50 | 1589668 prophet
prophet's picture

you really ought to post an article every couple of weeks

Tue, 08/23/2011 - 09:19 | 1589778 ZeroPower
ZeroPower's picture


Tue, 08/23/2011 - 09:07 | 1589737 hugovanderbubble
hugovanderbubble's picture


Here are the facts..


The last update on CDS2yr in EUropean banks and US banks...





Tue, 08/23/2011 - 09:20 | 1589780 ZeroPower
ZeroPower's picture

...Thank you ?

Tue, 08/23/2011 - 08:41 | 1589625 BetTheHouse
BetTheHouse's picture

Funeral march, bitchez!

Tue, 08/23/2011 - 14:22 | 1591342 Manthong
Tue, 08/23/2011 - 08:41 | 1589626 Popo
Popo's picture

And... SKF is in the shitter...

Tue, 08/23/2011 - 08:41 | 1589627 zorba THE GREEK
zorba THE GREEK's picture

Somebody better send out the BAIL signal for BENMAN.

Tue, 08/23/2011 - 08:41 | 1589628 sudzee
sudzee's picture

Ready, get set, PRINT.

Tue, 08/23/2011 - 08:42 | 1589632 maxmad
maxmad's picture

No QE3, bitchez!

Tue, 08/23/2011 - 08:42 | 1589633 Scisco
Scisco's picture

it may be time to cue the Lento from Chopin Piano Sonata, No. 2 in B-flat minor, Op. 35.


I LOLed. Thanks TD.

I feel like a masochist reading these headlines and laughing.

Tue, 08/23/2011 - 09:06 | 1589733 goldinpenguin
goldinpenguin's picture

Funny, I youtubed it

Periodic updates on the fin cds would be entertaining.


Is there any "drop dead" price for any of these CDS? The Merrill CDS is worse than BAC - if that is any consolation. Jefferies analyst said BAC needs to raise 40-50B capital

Tue, 08/23/2011 - 09:50 | 1589959 e_goldstein
Tue, 08/23/2011 - 11:22 | 1590380 Crack-up Boom
Crack-up Boom's picture

Ditto and ditto!  

Tue, 08/23/2011 - 08:42 | 1589635 John McCloy
John McCloy's picture

Tyler how dare you not pit GS in the bank category. Don't you have a Goldman branch in your area like me?
Ben said they are a bank so that's good enough for me.

Tue, 08/23/2011 - 08:43 | 1589638 AngryGerman
AngryGerman's picture

why not introduce worldbonds? let the germans also pay for everybody else?

Tue, 08/23/2011 - 08:48 | 1589664 magpie
magpie's picture

Recently i was discussing how a supermarket offers a "Euro-Wine" mixed from the finest Wines of Europe.

Sounds like a great idea.

Tue, 08/23/2011 - 08:52 | 1589677 prophet
prophet's picture

G-20.  BINGO.  $11T of global bonds to sop up the imbalances (and restructure the debts).

Tue, 08/23/2011 - 08:58 | 1589703 Scisco
Scisco's picture

Didn't they come to the conculsion that credit/debt needed to increase by 200 trillion next year? Global bonds sounds like a great way to do it.

Tue, 08/23/2011 - 09:16 | 1589765 disabledvet
disabledvet's picture

I've actually got the imside skinny on some martian bonds about to be released. Apparently they're back by all the mineral wealth on the entore planet. Maturity is a liitle long--says here a thousand years--so there is some duration risk. 4 and a quarter with "globaltax free status" tho. Obviously mars isn't going anywhere anytime soon...

Tue, 08/23/2011 - 08:43 | 1589640 Seasmoke
Seasmoke's picture

Brian Moynihan is going to wish he diversified his net worth

Tue, 08/23/2011 - 08:52 | 1589676 The Shootist
The Shootist's picture

Go big or go home banksters.

Tue, 08/23/2011 - 09:20 | 1589783 j0nx
j0nx's picture

Please. Whatever this joker said he did, he did the opposite. That bullshit was just said to fluff the sheep into believing all was well. Typical Baghdad Bob bullshit that we all heard leading up to the Subprime implosion and the 2008 financial calamity. Wouldn't surprise me if he shorted their stock secretly somehow on the back end.

Tue, 08/23/2011 - 08:45 | 1589645 prophet
prophet's picture

without an american bank in crisis it is so much harder to justify let alone hide the american participation in the european trap (troubled relief asset purchase)

free MER

Tue, 08/23/2011 - 08:46 | 1589651 ZeroPower
ZeroPower's picture

UBS is the biggest 'winner' on the day, 193/206... +24!

Tue, 08/23/2011 - 08:47 | 1589652 sudzee
sudzee's picture

Not to worry, the FDIC will cut you a post dated cheque. They've got lots of bucks coming in soon.

Tue, 08/23/2011 - 08:47 | 1589656 Surly Bear
Surly Bear's picture

I have a staunch cup of joe, a banana, and a sandwich for lunch. Forty-five minutes to the bell…let’s start the show!

Tue, 08/23/2011 - 08:48 | 1589659 Village Smithy
Village Smithy's picture

Help me out here, which Bugs Bunny episode is that particular piece from again? 

Tue, 08/23/2011 - 08:48 | 1589660 Another Texan
Another Texan's picture

I never thought shorting a company would make me so happy.  Everytime i drive by the local BAC branch, i just smile to myself.



Tue, 08/23/2011 - 08:50 | 1589670 scratch_and_sniff
Tue, 08/23/2011 - 08:52 | 1589671 Archimedes
Archimedes's picture

Bank of America is currently trading at 1/3 of it's book value! Yet no Hedge fund, Blackrock, Paulson, Tepper, Buffet want to buy a company at a third of it's price? Where  are all the bulls to Buy!Buy!Buy?

This means everyone knows that The bank is not worth what it says it is and it is going down. Oh, and in other news That old hypocrite Warren Buffet has lost nearly 2 Billion on his BYD investment! Ha!Ha!



Tue, 08/23/2011 - 09:14 | 1589755 slaughterer
slaughterer's picture

BAC common fair value is $2.  Everybody knows this by now. 

Tue, 08/23/2011 - 08:53 | 1589684 Hedge Hunter
Hedge Hunter's picture

BAC shareholders are about to take a bite of a big shit sandwich.



Tue, 08/23/2011 - 09:00 | 1589710 Gibu The Great
Gibu The Great's picture

Credit markets are obviously reflecting where we are headed in the coming days/weeks.  Stocks are still running on hopium ahead of Friday.

Just watch BAC go from +2% to -2% in premarket in the span of a few minutes.  Euro indicies are well coming well off their highs and futures are cooling.  Same with the (light) selling in gold.  Looks like we're setting up for yet another interesting day at the casino. 

Tue, 08/23/2011 - 09:04 | 1589720 BetTheHouse
BetTheHouse's picture

The market is oblivious.  Merrily ticking higher.  It's going to be a rude awakening at some point. 

Tue, 08/23/2011 - 09:06 | 1589731 Gibu The Great
Gibu The Great's picture

It's hopped up on hopium anticipating some sort of QE from Big Daddy Ben on Friday.  But it is likely that will not come.  Perhaps then the market will wake up and find that that "falling in my sleep" feeling is real, and there's a long way yet to go.

Tue, 08/23/2011 - 09:08 | 1589738 myztix
myztix's picture

what causes the CDS to go in a huge crazy death roll like that?

Is it losing value just like that or is it pure speculation that BAC is going to fail.

It's been talked that 400+ CDS is bad and marks the march 2009 lows.

What exactly is the CDS.. trying to gain some knowledge here.

Tue, 08/23/2011 - 09:18 | 1589771 bill1102inf
bill1102inf's picture

CDS is Credit Default Swap, it is INSURANCE against default, you buy CDS when you think an entity is going to default, the more expensive it is the higher the risk.  See - Bank Of Scamerica is INSOLVENT - has been for YEARS!! Thats why anyone can buy it for 1/3 what its 'value' is, YET NO ONE will touch it. Thats because it is bankrupt 6X over, literally.  This from a company that has 29.9% Credit Cards, borrows at 0% from the fed, off shores employees (India), and took BILLIONS in bailout $$$.  And oh, they paid their execs bonuses... BIG BONUSES

Tue, 08/23/2011 - 10:23 | 1590126 Financial_Guard...
Financial_Guardian_Angel's picture

Brilliant and perfect explanation. I would add they are insolvent because the mortgage loans they hold are double (or worse) than the value of the property. This is based on the "mark to myth" accounting rule that was allowed by the current administration.

Tue, 08/23/2011 - 09:23 | 1589806 ZeroPower
ZeroPower's picture

Gonna try to be as concise with all points as i can

What causes CDS to go in a 'death roll' is the market participants (credit trading desks) which send out runs (prices) at which you can buy or sell CDS of a particular flavor (maturity/entity/size). As there is no central excahnge, these participants can quote whatever prices they like or which they believe are reflective of current market conditions.

Typically, as the stock loses value, the CDS tends to spike as a reflection of risk.

400+ CDS is subjective, while the EU banks are at all time highs with their CDS, the US banks still have some ways to go with their prices.

Tue, 08/23/2011 - 09:14 | 1589753 goldinpenguin
goldinpenguin's picture

BAC down about 2% premarket even though mkt futures are up about 80. 

BAC really needed to pull a lot of bucks out of their China bank investment, now it will come out of current equity holders hides.

Tue, 08/23/2011 - 09:14 | 1589756 gwar5
gwar5's picture

Cue the Lento?  Or cue Jay Leno?


Tue, 08/23/2011 - 09:21 | 1589787 monopoly
monopoly's picture

BAC the first one to file? I think there will be riots in the streets if govt. idiots try to use taxpayer money again to save this bank.

Tue, 08/23/2011 - 09:27 | 1589827 Surly Bear
Surly Bear's picture

I used to think the same thing, but I have reached the conclusion people just want this, the status quo, to go on forever. Things change. People change. Maybe someday we can get back to real assets, but that isn't today. Take care.

Tue, 08/23/2011 - 09:26 | 1589822 lance_manion
lance_manion's picture

Anyone recall the comic strip Bloom County?  "Avast ye scurvy dogs, Bank of America is about to go belly up!!". 

Tue, 08/23/2011 - 09:33 | 1589870 cowdiddly
cowdiddly's picture

Now open the window and crawl out on the ledge. Contemplate the millions of peoples lives you have been directly responsible for destroying then.......JUMP YOU SCUMBAG.

Tue, 08/23/2011 - 09:38 | 1589891 Gibu The Great
Gibu The Great's picture

I do wonder if BAC will break into the 5's today. 

Tue, 08/23/2011 - 09:44 | 1589929 goldinpenguin
goldinpenguin's picture

BAC at 6.05 a couple mins ago

Tue, 08/23/2011 - 09:47 | 1589946 Gibu The Great
Gibu The Great's picture

David Faber cheering on BAC. 

Tue, 08/23/2011 - 10:36 | 1590200 Dingleberry
Dingleberry's picture

Fuck Faber. He is even worse than Liesman.

Tue, 08/23/2011 - 09:48 | 1589954 oogs66
oogs66's picture

BAC cds trading up at 420!

Tue, 08/23/2011 - 10:43 | 1590222 Cone of Uncertainty
Cone of Uncertainty's picture

Don't worry guys Dick Bove is out telling everyone its fucking roses over at BOA.

Bove told Bloomberg TV Tuesday morning "There's no reason for the bnak to have to go out and raise capital whatsoever."

Bove currently has a Buy rating and $14 price target on shares of Bank of America.

This guy should be listened too at all costs, because he knows his shit people, there is nothing to worry about over at BOA.

This guy nailed the call on Lehman, so why would anyone doubt him now?

Membah dis:

“If one assumes that the Neuberger Berman subsidiary is worth
somewhere between $9 to $13 billion, the rest of the company is being
valued at less than zero. A valuation of this nature would only make
sense if the company were to go out of business and then still owe
money to its creditors, which of course could not happen. Once it is
bankrupt, it is bankrupt.”


“A deep pocket buyer would not be
under any pressure to sell any assets. It could wait until they mature.
It could sell Neuberger for more than the value of the whole company
and basically own Lehman Brothers for nothing.”

Richard X. Bove, 8/21/2008

Tue, 08/23/2011 - 11:23 | 1590389 nyse
nyse's picture

The two numbers are the bid and ask, correct? Thanks

Tue, 08/23/2011 - 12:34 | 1590663 Winston Smith 2009
Winston Smith 2009's picture

More desperate measures at taxpayer expense?:

Rumor: JP Morgan May Take Over Bank Of America
August 23, 2011 at 12:14 pm


There is a rumor circulated on Wall St. that JP Morgan (NYSE: JPM) will take over Bank of America (NYSE: BAC) within the week. The government will support the deal with a $100 billion investment in preferred shares issued by the combined entity. Alternatively, the government may guarantee the value of a large pool of Bank of America assets. The word is that Treasury Secretary Geithner has discussed the transaction with JP Morgan CEO Jamie Dimon.The “merger” would completely destroy the value of BAC’s common shares.

The government feels that the deal may be necessary as Bank of America struggles unsuccessfully to close several transactions to bolster its balance sheet. The Wall Street Journal reported that the financial firm will need to raise $200 billion which would be another possible event that would wipe out common shareholders.

Tue, 08/23/2011 - 13:51 | 1591066 jmc8888
jmc8888's picture

For anyone that doesn't know, youtube it.  You've heard it in movies and cartoons many times before.

Sat, 08/27/2011 - 22:11 | 1608662 Sambo
Sambo's picture

Where is Lehman?

The problem is everybody is looking for a Lehman this year.

When the crowd is all looking in one place, it is time to look someplace else.

Do NOT follow this link or you will be banned from the site!