Financial CDS Spreads Explode

The bloodbath in fin CDS is even worse than what is going on in equities. Bank of America is currently at the widest it has been in 2010.The latest rack is provided below, and the LTM 5 year Sr CDS spread is charted below.

  • Bank of America Corp.    196.50    184.5    +12.00
  • Citigroup Inc    163.50    162.5    +1.00
  • Capital One Bank    101.50    96.5    +5.00
  • Capital One Financial Corp.    137.50    135.5    +2.00
  • JP Morgan Chase & Co.    95.50    90.5    +5.00
  • Wells Fargo & Company    125.50    118.0    +7.50

Yet the biggest bloodbath continues to take place in woefully underreserved HR Block, which is certainly not too big to fail, and which was about 30 bps wider on the day, now at 720/691. On the chart below, HRB's spread is on the right axis. Will the little tax preparer that almost could be the first casulaty that sets off the TARP 2 starter pistol?