Goldman CDS Hits 140 As Stock Plunges

Yesterday we speculated Goldman CDS should hit 140. It is there now, as the stock is plunging by nearly 5%. At this point the Stock-CDS arbitrage is negligible, and declined from 16% yesterday to just 4% today. Currently CDS is fairly valued on a relative basis, assuming the stock price is fairly valued, which it isn't if prop trading is killed. LBO prospects are still not considered.