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The credit bears were licking their chops on Wednesday as resurging problems for banks punctured hopes that the worst of the credit crisis was over.

The cost of protecting the debt of investment grade and junk-rated companies against default has climbed recently after a protracted period of falling costs. Sentiment darkened this week as rumours battered Lehman Brothers, frazzled UK bank Bradford & Bingley re-jigged its rights issue and credit agency Standard & Poor’s said all kinds of assets on banks’ balance sheets were deteriorating, making extra writedowns possible.

For analysts and traders who have been consistently bearish on the outlook for credit, the shift has been a long time coming. And while this might be a moody blip before the markets cheer up, the bears are urging patience.

Willem Sels at Dresdner Kleinwort, who thought the rally was already ahead of itself two months ago, told his clients in a note: “bad things come to those who wait.” Some of the grim news he predicts, like a sharp increase in defaults by high-yield companies and bad economic data from the US, have yet to materialise fully.

“But it is natural that these phenomena act with a lag, and patience will soon be rewarded, we think,” he wrote. High-yield companies have so far been saved by locked-in funding and refinancing agreements, he added, but once these peter out the defaults will kick in.

Since peaking in March as Bear Stearns imploded, the cost of protecting the risky debt in the iTraxx Crossover index has fallen by more than 250 basis points or 40 per cent from its peak, with investment-grade protection taking a similar dip.

Having hit a low of 70bp in May, the iTraxx Europe was at 88.25bp on Wednesday, up 3.1bp on the day. This means it costs an annual fee of €85,250 to protect the index’s debt against default for five years. The iTraxx Crossover was 5.6bp up on the day at 478.17.

As fellow bear Mehernosh Engineer, strategist at BNP Paribas, said darkly: “this is far from over.”