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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Sunny Jim who wrote (75193)	12/10/2006 6:20:29 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

I'm confused. If corporates and junk are going to get crucified, I assume that means people will be selling them, thus causing prices to drop. Wouldn't that cause the rates to go up, not down? Why would it? Rates massively dropped when spreads blew out in the wake of the dotcom bust. They will do so again IMO. There was and would be again a flight to quality type of action in treasuries. The US government is simply not going to default (not in the traditional sense). We are going to see all kinds of subprime garbage default, and probably Ford, and other junk garbage that "investors" are piling into. Mish