Silicon Investor (SI) -- The First Internet Community

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 : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (21291)	1/13/2005 2:29:14 PM
From: Crimson Ghost	Respond to of 116555

That was all from BCA. They are also turning cautious on corporate bonds: Take Profits On Overweight Corporate Bond Positions 10:51:00, January 11, 2005 Deterioration in valuation and fundamentals, combined with a more aggressive Fed, demands a reduction in exposure to global corporate bonds. Our checklist has begun to warn of a worsening in corporate fundamentals. Corporate sector health remains strong, but equity buybacks, dividend payout ratios, and M&A activity have all begun to rise. Moreover, valuation has continued to deteriorate. U.S. corporate spreads have narrowed to or near overshoot levels. The minutes of the latest FOMC meeting support a more cautious stance toward corporate bonds. Some Fed policymakers expressed concern with “potentially excessive risk taking in financial markets” and specifically mentioned tight corporate spreads. The risk of a policy error is high because the Fed will likely raise rates until the pain threshold for financial markets is reached.