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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (27122)	9/9/1998 7:28:00 PM
From: GROUND ZERO™	Read Replies (2) \| Respond to of 94695

Bill, I know. But I think the market will jolt down then resume upward shortly thereafter. We'll see. GZ

To: William H Huebl who wrote (27122)	9/9/1998 8:45:00 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 94695

Anyone still doubt there's a recession coming? After the close today, CNBC did a report touting corporate debt for its attractive yields relative to treasuries, noting that spreads on even investment grade debt have widened considerably over the last few months. Some Ford notes issued in May, for example, were offered then at a 70 basis point spread over comparable treasuries. Today, they are priced to yield 120 basis points over treasuries. Rising risk premiums on corporate debt is a classic indicator of a coming slowdown as the demand for riskier paper dries up and corporations are forced to either pay up or cut back on capital spending. Either way, it's not good for future corporate earnings or any other measure of economic growth. Also, if the appetite for public corporate debt is shrinking, it is very likely that credit standards at banks are tightening and rates are rising in that market too. Now, I haven't seen data to back up what CNBC said (if anyone has a source for credit spread data, please share), but if true, that's another point against the bull returning any time soon. Regards, Bob PS: S&P futures are now at a >11 point discount to cash and the Nikkei, after early gains, is now negative.