Best Financial Markets Analysis Article In light of the WCI Chapter 11 Bankruptcy Filing this morning, inquiring minds have been asking "Who's Next?"

While that question cannot be directly answered, we can take a look at how the credit market players perceive the situation.

Homebuilder Credit Default Swaps

The above chart is thanks to Chris Puplava at Financial Sense .

For more on Credit Default Swaps
Pimco: What Are Credit Default Swaps and How Do They Work?
Wikipedia: Credit Default Swaps
CBOT: CDS Example

After topping in December of 2007 and again in March of 2008, homebuilders staged a huge rally in credit worthiness terms until June 2008.

Hovnanian (HOV), Beazer Homes (BZH), and Lennar (LEN) are now the three most likely bankruptcy candidates on the above list of homebuilders (at least from a credit player's perspective). In December 2007, Standard Pacific (SPF) was far and away the most likely to go bankrupt.

Ryland (RYL), Pulte (PHM), Toll Brothers (TOLL), and especially MDC Holdings (MDC) are the least likely homebuilders on the above list to head for bankruptcy.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

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