Two Ways: IMF Sees Trillions in Toxic Debt
Strengthen your portfolio in good times and bad.
Cost of Protecting Bonds Jumps
In the wake of a series of reports saying the International Monetary Fund (IMF) estimates toxic debt held by financial institutions could rise to $4 trillion, the cost of protecting bonds from default on European banks jumped.
According to Bloomberg, credit default swaps on the benchmark iTraxx Financial Index, which is linked to 25 European financial companies, rose for the first time in 4 days - up 5 basis points to 165 this morning in London. Bad assets in the US may rise to $3.1 trillion, up from the IMF's January estimate of $2.2 trillion. Furthermore, the IMF may raise its estimate of toxic debt from Europe and Asia by another $900 billion.
Global financial institutions have suffered $1.3 trillion in losses since the beginning of the credit crisis. For more on the economy, see Professor Jack Lavery's Housing Optimism Is a House of Cards.
From the Bull Pen: Was the pullback in gold a buying opportunity? Those bullish can use the Goldminers ETF (GDX). Notice how the stock found support at its 200 DMA ($32.50-ish); a sell stop can be set below that level.
From the Bear Cave: Those bearish can look to Toyota (TM) for a downside play. The stock may be due for a correction; a buy stop can be set above $75.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.46%, Nikkei -0.28%, Shanghai 0.80% and Taiwan 0.37%.
Glancing towards Europe, we see the CAC -1.59%, DAX -1.15%, FTSE -1.81%, ATX -2.25%, Swiss Market -0.25% and Stockholm -1.35%.
As of 8:30 AM EST, S&P Futures are trading -12 to 817.00, and Nasdaq futures are -15 to 1296.00.
A Look at Commodities
Over in commodities, crude oil is trading -0.95 to 50.10 while gold is +5.20 to 878.80 this morning. Silver is +0.250 to 12.135 and copper +1.85 to 197.75.
The dollar index is +0.60 to 85.6800.
On the Radar
03:00 Consumer Credit
After: AA, MOS, BBBY, RT
Click here for the full trading radar.
Good luck today, Minyans! Have a great day!
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