Libor soars as credit crunch returns

[Sapiens]

http://www.telegraph.co.uk/money/mai...cnlibor120.xml

Libor soars as credit crunch returns
By Edmund Conway, Economics Editor
Last Updated: 12:53am GMT 20/11/2007



The credit crunch is returning in a virulent form to money markets, experts warned, after City banks raised their wholesale lending rates to the highest level in two months.

Morgan Stanley said that the recent jump in the benchmark London Interbank Offered Rate, which yesterday rose to just under 6.45pc, was not merely a seasonal blip but a major warning sign of pain ahead.

...

Richard Berner, of Morgan Stanley, said the spreads on Libor rates "are likely to stay wide or widen for several months", spelling more trouble for banks that raise their cash in the money markets.

ARMs holders based on this variable are going to feel major pain.

[Sapiens]

Credit crunch clouds darken over UK

http://uk.reuters.com/article/busine...10018920071120

Credit crunch clouds darken over UK
Tue Nov 20, 2007 11:56am GMT

By Mark Potter

LONDON (Reuters) - The protracted global credit crunch claimed a new British victim on Tuesday, as mortgage lender Paragon warned it may need to raise funds from shareholders, sending its stock down as much as 50 percent.

The warning sent fresh shock waves through Britain's already battered banking industry, with shares in Northern Rock suffering one of their biggest falls since it was forced to seek emergency funding from the Bank of England in September.

Bradford & Bingley, Britain's biggest buy-to-let mortgage lender, added to jitters by saying it had sold loan books comprising over 4 billion pounds of assets to increase its liquidity.

"We do not believe we are yet at the bottom for the UK banks sector and the more retail-exposed, wholesale-funded (and also capital markets-geared) names will continue to lead the sector down," said Collins Stewart analyst Alex Potter.

[Sapiens]

Fallout From Credit Crunch Creates Another One

http://www.washingtonpost.com/wp-dyn...111901608.html

Fallout From Credit Crunch Creates Another One

By Neil Irwin and Tomoeh Murakami Tse
Washington Post Staff Writers
Tuesday, November 20, 2007; Page D01

The credit crunch is back.

After improving in September and early October, markets in a wide variety of debt -- including for home mortgages, consumer loans, and corporate buyouts -- have sharply deteriorated in recent weeks. Investors view much of this debt as riskier than they did even at the height of the August credit crisis and are requiring higher interest rates as compensation.

...

Banks are required to keep capital on hand so they can weather losses. The mortgage-related losses are cutting into their capital and thus could cause a commensurate drop in how much they can loan. Taking into account that "multiplier" effect, the mortgage problems could reduce by $2 trillion the credit available to consumers and businesses, Goldman estimated in the report.

[FRED]

Swaps…today”s Move In Swaps Worse Then Any Day During The Summer

http://www.washingtonpost.com/wp-dyn...111901608.html

SWAPS…TODAY”S MOVE IN SWAPS WORSE THEN ANY DAY DURING THE SUMMER

2 yr 8.5 wider +105.5
5yr 14 wider +109
10yr 6.5 wider +86.50