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Behind The Bruising Bank Stocks

While bank stocks are getting killed, the cost of insuring their debt is going down, Peter Boockvar at Miller Tabak notes.

"Today's action in the banks and the government's actions to help them is making it clearly evident that what is good for their viability and bondholders will not square with the interests of equity holders at the bottom of the capital structure," Boockvar says.

While their stocks are down sharply again, at midday, the 5 yr Credit Default Swaps (CDS) of Citi has fallen to 278 basis points from 346 basis points yesterday 410 on Wednesday (this means it costs $278,000 to insure $10 million of Citi's debt).

B of A's 5 yr CDS is at 180 bps down from 214 on Thursday and flattish with Wednesday.

JP Morgan's CDS is quoted at 145 vs 155 yesterday and 163 bps Wednesday as of midday.

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