The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: John Vosilla who wrote (73855)	11/8/2006 11:29:17 AM
From: Real Man	Read Replies (1) of 110194

That's true. But it is also true that the debt of 1/2 of SP500 companies is now rated ``junk'' by bond rating agencies, the highest fraction ever. It is also true that most earnings growth in SP comes from oil companies and banks. Liquidity is injected into these markets, so they rally. A bunch was injected today. This can continue forever. The achilles heel of this process is the value of the dollar. So far, though, nothing drastic has been happening on that front - the dollar is getting bought by someone, and so is all the new dollar-denominated debt, including junk. But a break of 80 for USD index could have very negative consequences: lower dollar, higher rates, lower stocks. How negative? It depends how long they can play these games.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next