Credit markets
Lawsuits add to ACA Capital's downgrade misery
Embattled financial insurer ACA Capital has been dealt a further blow by the announcement that two class action lawsuits are being brought against the company on behalf of shareholders who have seen the value of their investment plummet.
VAR exceptions reflect volatile season
Investment banks reported increased numbers of high trading losses in the third quarter of this year, highlighting the volatility in the financial markets and casting doubt on their risk modelling.
UBS's Tyger CPDO notes hit cash-out point
UBS's Tyger has become the first constant-proportion debt obligation (CPDO) to hit its cash-out trigger, resulting in 90% losses for investors in one tranche of the CPDO's debt.
Deutsche launches Asian currency-correlation indexes
Deutsche Bank has launched a set of indexes designed to capture returns generated by the apparent growing co-ordination of currency policy among Asian central banks. They are the first such indexes in the market.
Swiss Re admits $1.07 billion loss on two portfolio CDSs
Zurich-based reinsurer Swiss Re has admitted a loss of SFr1.2 billion ($1.07 billion) caused by a fall in the market value of two credit default swaps (CDSs) referenced to a trading portfolio containing US subprime mortgages.
Lower losses than feared at Barclays
Barclays reported a total of £1.5 billion in write-downs associated with US subprime mortgages between June and October this year, reassuring investors who had feared far higher losses.
Bank of America's $19bn China windfall dwarfs $3bn writedown
The $3 billion writedown disclosed by Bank of America early this week has been overshadowed by the announcement that an investment in China stands to earn the firm $19 billion.
Markit buys IIC and CDS IndexCo
London-based market data provider Markit is to expand by taking over the dealer-owned International Index Company (IIC), which produces the iTraxx credit indexes and the iBoxx bond indexes, and the dealer consortium CDS IndexCo, which produces the CDX…
$400 billion losses on subprime, predicts Deutsche Bank
Subprime losses could total $400 billion by the time the crisis has run its course, with large international banks and brokers taking up to a third, according to research published by Deutsche Bank yesterday.
Wachovia declares $1.1 billion writedown for October
Wachovia has announced $1.1 billion in writedowns for the month of October, as the bank’s holdings in collateralised debt obligations (CDOs) and mortgage-backed securities (MBS) continue to lose value.
Crowded trade increases turmoil again, say CROs
Daily news headlines
Morgan Stanley and Merrill Lynch reveal billions more subprime damage
The subprime crisis continues to deepen as Morgan Stanley and Merrill Lynch, two of the worst-affected US banks, reveal further damage - and an SEC investigation into Merrill Lynch.
Risk USA: Crowded trade increases turmoil again, say CROs
Chief risk officers from four major financial institutions argued that the distress in the financial markets has been partly caused by the concentration of money chasing too few trading ideas, when speaking on a panel at this year’s annual Risk USA…
Deutsche launches credit ETFs for European investors
Deutsche Bank is to launch three short-strategy iTraxx Exchange Traded Funds (ETFs) on its pan-European ETF platform, db x-trackers.
Risk USA: Simpler structured products needed
Speaking at the annual Risk USA conference in New York, Joseph Mason, an associate professor of finance at Philadelphia's Drexel University, pushed banks to originate simpler products to increase transparency and information flow between buyers and…
Short iTraxx funds begin trading
Three exchange-traded funds (ETFs) based on the total return of short European credit derivatives index positions begin trading this week.