Below we highlight the year-to-date change in credit default swap prices for the major banks and brokers around the world. Unfortunately, a gain in CDS prices is a bad thing, as it means that default risk has gone up. And it has gone up significantly for financial companies once again this year.
For the majority of financials, CDS prices are still not as high as they were during the financial crisis, but they're starting to get close. And interestingly, while the European banking system is the one that is supposedly in trouble, two US financials are up the most this year -- Morgan Stanley (MS) and Goldman Sachs (GS).
Below we also highlight the change in stock prices in 2011 for the companies featured above. As shown, Commerzbank in Germany is down the most at 62%, followed by Bank of America (BAC) (-60.1%), Soc Gen (-55.1%), Morgan Stanley (-54.6%), and Citigroup (C) (-52.4%). If we look at both CDS and stock price, Morgan Stanley seems to be the biggest loser in the global financial sector so far in 2011.