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

To: orkrious who wrote (85875)	9/4/2007 4:18:49 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

afbix isn't invested so that the inverse correlation is that strong well, it is highly negatively correlated to the DJ NA CDX HY index. what i don't understand is why that index, which is supposed to be representative of US junk (i believe it consists of 1% weightings of 100 different HY corporate bonds), has not tanked commensurately despite the explosion in spreads you showed. there are some missing pieces to the puzzle which i don't understand. here is the index (price is the black line). note that it put in a decent bottom at 91 sometime around the end of July, whereas your chart of junk spreads has just kept climbing and climbing. also note that spreads (the red line) put in a top on this index in late July and have descended considerably, despite the continued rise in your spread chart. here is AFBIX: stockcharts.com (btw, where is a good place to link stock charts from nowadays? i thought stockcharts would work but maybe not anymore?) and here is the explosion in spreads from your site: