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To: Defrocked who wrote (3035)	10/26/1997 5:39:00 PM
From: LLCF	Respond to of 10921

<Typically, flight to quality shows up as an increase in credit spreads during business deterioration while gains in the quality of issuers occurring in business cycle upswings decrease credit spreads. The market is currently suggesting the former i.e. credit deterioration.> I assume that the credit spreads have deteriorated lately and hence your statement above...I say this because the current credit spreads between corperates and Govt securities are very narrow historically at the "investment grade" level (junk too for that matter) and therefore portend good times to continue...not credit deterioration. DAK