Credit Rout for Wachovia, WaMu
But stock market's still wearing blinders.
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Have you ever walked up to a diner really hungry and seen a "closed for business" sign on the door?
Welcome to the credit market, folks - it's officially closed. After Lehman, Fannie Mae (FNM), Freddie Mac (FRE), AIG (AIG) and Washington Mutual (WM) debt and preferred holders have been unmercifully tossed under the bus so Jamie Dimon can be given banks, do you really think many want to get in front of this train wreck?
Me thinks not.
- For what it's worth, I was just offered Wachovia (WB) 5.8% hybrids at $0.10 on the dollar, and I passed. A block of 30-year Wachovia paper just traded at $0.35 on the dollar.
This is not preferred stock or hybrid, folks, this is subordinated debt.
Washington Mutual sub paper? $0.01 on the dollar. This is what a credit rout looks like. And until this ship is righted, watch out.
There are others trading similarly, like Morgan Stanley (MS) and, while I have no positions, it's quite interesting to watch.
Many regional banks are likely next.
Risks remain high, and the stock market, in my opinion, still has blinders on.
Is there another Bear Stearns out there?
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