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IBDvalueinvestin (99.66)

LIBOR suggests "Credit CRUNCH on the Horizon"

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May 09, 2010 – Comments (3)

John Nyaradi  :

The scary news is that LIBOR, the interbank lending rate, has been steadily climbing, just as it did in late summer 2007, indicating the potential of a credit crunch just ahead.

As I said last week, just think of Bear Sterns and Lehman Brothers on an international scale.

Overall, it appears that European banks are on the hook for more than $2 trillion in sketchy sovereign debt, $500 billion from Spain alone. Yields in Spain soared this week as the sharks start to circle the next weakest fish in the sea.

On the home front, the news was mixed and almost unnoticed as the global drama unfolded.

Four banks failed on Friday, bringing the year’s total to 68.

Moody’s (MCO) is under investigation by the SEC.

Wells Fargo (WFC) is being investigated over their mortgage lending practices.

Unemployment crept up to 9.9% from 9.7% and while new jobs were created, the U6 figure, the “underemployment” rate, continued its steady climb from 16.9% to 17.1%.

3 Comments – Post Your Own

#1) On May 09, 2010 at 2:25 PM, simplemts (< 20) wrote:

IBD, last week every down day you advocated buying "After 1987, those who bought the crash did quite well".  Are you now against buying just a couple of days later?  What has changed?

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#2) On May 09, 2010 at 10:44 PM, Momentum21 (95.59) wrote:

simplemts (76.28) - I was thinking the same thing...at some point in late-April he had an awakening and shifted course dramatically. Not that there is anything wrong with it of course but the blogging went from finding value stocks...to the joy of "squeezing bears" in the AM...to how Alstry was right and we are all headed to hell...

I want a blog that gives insight into this transformation IBD... : ) 

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#3) On May 10, 2010 at 10:07 AM, IBDvalueinvestin (99.66) wrote:

Bears still strong from watching actions on :

STP from $12.17 to $11.43

PCLN from $248 to $243

ISSI from $10.90 to $10.57

CAGC from $15.68 to $14.39

 

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