The swap spreads on Lehman Brothers rocketed to 465 yesterday, mirroring the moves in Bear Stearns debt days before. Fannie Mae and Freddie Mac – the venerable agencies created by Roosevelt that underpin 60pc of the $11 trillion mortgage market – had a heart attack on Monday. Their bonds were in free-fall, threatening to set off another cascade of bank writedowns.
Monday mornin\’s gonna be interesting. 11.30, 12 am UK time. As the US debt markets wake up.