S&P Action Triggers Widening in B&C Indicator

Standard & Poor's placement of 612 subprime bonds on CreditWatch negative (see item below) "has triggered massive widening" in the U.S. ABX index, which is sometimes viewed as a subprime/home equity indicator, according to a Tuesday morning RBS Greenwich Capital report.Mortgages in general also cheapened Tuesday morning as Treasury prices rose in response to the negative rating actions, according to a report by hedging consultancy Parker & Co. However, the RBS Greenwich Capital report indicated that as of Tuesday morning, while the general mortgage basis looked "a little cheap," it was not reflecting "panic pricing."