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

To: mishedlo who wrote (88830)	10/20/2008 5:56:36 PM
From: SouthFloridaGuy	4 Recommendations Read Replies (2) \| Respond to of 116555

Mish, the moves in corporate bonds have almost NOTHING to do with fundamentals anymore. It's been technical hedge fund selling ever since the systemic banking problems exploded in the past 2 months. Indeed, in the loans space you can buy loans at recovery value with 15-17% coupons, senior in the cap structure. The risk is purely mark to market. There is NO differntiation between asset rich, asset poor or very solvent versus semi-solvent companies. The correlations have been 1 for all securities. There isn't a reason to even buy equities at this point because corporates are yielding so much. This is Max Fear and Max Pain. It cannot and WILL NOT go on for much longer and I suspect given the moves in swap curves today, it won't.

To: mishedlo who wrote (88830)	10/20/2008 9:51:17 PM
From: Fiscally Conservative	Read Replies (1) \| Respond to of 116555

Do You mean to say;it is almost time to go on a Corporate Bond Spree ?

To: mishedlo who wrote (88830)	10/21/2008 10:35:50 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 116555

Credit markets have fallen so far that they are providing a "once in a lifetime opportunity," and investors are still selling. "There has been widespread liquidation of assets that has nothing to do with fundamentals," said Scott D'Orsi..... "Investors in bank debt are being presented with a vast number of extraordinary opportunities; opportunities that I would characterize as once in a lifetime." If something is widely touted as "once in a lifetime" opportunity, it most likely isn't. If deflationary depression arrives, the default rate will be much higher than 5%. It will be closer to 20%. In hyperinflation bonds will be a total loss, no matter what the yield. With bonds, you lose most of your money either way, no matter which outcome will come to pass.