October 11, 2008

Lehman CDS Auction Should Reveal Winners and Losers

Oct 11 2008

Until now, it hasn’t been entirely clear how much damage will result from the Lehman bankruptcy. An auction taking place today will be an important step in assessing which financial institutions stand to take a hit. Today’s auction involves a type of security that many people know little about or have only heard of recently: credit default swaps.

What are credit default swaps?

Generally, an “investment swap” involves trading one security for another. However, another kind of investment swap is a contract: one in which two parties agree to enter into transactions with each other on the basis of changes …

FDIC Account Insurance Limits Raised Temporarily

Oct 11 2008

As part of the Emergency Economic Stabilization Act of 2008, the level of FDIC insurance coverage has increased as of October 3rd to $250,000. As I noted in an earlier post, it’s possible to have much more than $250,000 of coverage at the same bank, because the coverage depends on the titling of the account.

For example, if a husband and wife each have an IRA and an individual account, and the two also a joint account at the same FDIC-insured bank, their deposits are insured to the follow limits:

Husband:
Single-owner account – $250,000
Joint-owner account -$250,000
IRA …

Archive - October 11, 2008