CDS spreads continue to widen

The Lehman Brothers news, the AIG fiasco and the Merrill Lynch deal offer up quite a cocktail for the markets to digest. It's fair to say that there's a lot of acid in stomachs out there, still. Credit Derivatives Research's Counterparty Risk Index, which tracks credit default swaps on 15 leading financial firms, has been soaring. As you would expect, spreads on AIG CDSs soared thousands of points. The fear is palpable. In addition, the two remaining independent investment banks, Morgan Stanley and Goldman Sachs, have also seen their spreads widen a bit. The gut-wrenching turn of events may create some lasting uncertainty. It's hard to see what will offer any real salve in the immediate future.

For more:
- here's the article from MarketWatch

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