Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: energyplay who wrote (24124)	10/12/2002 2:28:10 AM
From: Mark Adams	Read Replies (1) of 74559

the the spreads of U.S. Corporate bonds over Treasuries were starting to narrow. Yes, but this is by the Treasuries increasing in yield. Corporates prices were down, using the Vanguard Intermediate Term as a proxy. finance.yahoo.com finance.yahoo.com Maybe the end of this crisis ? We can hope. But as Rubin so wisely advised, keep enough liquidity available in the event things don't get better. RUBIN; on handling diverse alternative outcomes Message 17672267 Relevant extract from above link; "... building liquidity is critical, and the cost of doing so ought not to be a deterrent, because there is no way of knowing how much creditor risk aversion might accompany difficult conditions if they occur, and the risk of being short of cash in a risk-averse environment is not, in my view, worth taking. In the United States, today, corporate debt issuance is at very high levels, for this very reason, and corporate debt pricing in the markets is very sensitive to liquidity status. I would also add that I think investors should seek some similar balance between equity exposure to realize the benefit of favorable times if that should occur, and an overall portfolio that can comfortably weather adversity should that occur." D and Duk finally got the message.

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