Merrill Lynch files lawsuit involving 7 CDS against XL Capital Assurance/SCA

The question is, whether XL’s termination of 7 Merrill CDS will accelerate the big derivative unwind by bringing the problem to light and triggering a run for the exits.   http://business.smh.com.au/merrill-in-fresh-debt-tangle/20080320-20ll.html

→Here’s the Complaint:  xl_complaint.pdf

NEW YORK (Dow Jones)–A Merrill Lynch & Co. (MER) unit sued a unit of bond
insurer Security Capital Assurance (SCA) on Wednesday, alleging the company is
attempting to avoid its financial obligations of up to $3.1 billion under seven
credit default swaps.

Iranian military shells Iraqi villages

I haven’t noticed this being discussed in the media yet.

“The Iranian military on Wednesday [March 19] shelled seven Iraqi border villages, causing no injuries or damage but terrifying residents, an Iraqi official said.

The shells were apparently aimed at bases of Kurdish rebel group Pejak (Party of Free Life of Kurdistan), said the mayor of Zarawah, a frontier town in northeastern Iraq.Pejak is accused by Tehran of launching deadly attacks on security forces in northwestern Iran.”

http://www.khaleejtimes.com/darticlen.asp?xfile=data/middleeast/2008/March/middleeast_March302.xml§ion=middleeast&col=

Also reported on March 19, while traveling in Oman, V.P. Cheney says that Iran may have restarted its nuclear weapons program.  http://www.breitbart.com/article.php?id=D8VGJH980&show_article=1

Carry trade unwind? The America Premium

This writer takes a look at the big spike (click on image for larger version) and asks, ”Is this the new point of stress in the global financial system?”

“The 30-year, yen basis swap, after rising gradually away from zero since the beginning of the year, has suddenly spiked – and it seems likely that macro funds will be hurting.”

 Link:  http://ftalphaville.ft.com/blog/2008/03/18/11687/the-america-premium-this-could-hurt/