Comments on: Credit Market Warnings Escalate: Barclays, Fleckenstein Sound Alarms

By: leftback

leftback — Sun, 29 Jun 2008 01:52:00 +0000

Yves, I agree with the statement from Barclays about corporates and high yield rates rising.

Is there for a way for small investors to be Bearish of corporate debt? The best I could find was a Rydex fund called RYIYX – I have been in this since September – the fund holds CDS, and shorts bonds. It has followed the TED spread to some extent since the end of the Fed interventions in March.

Anyone got a better vehicle?

By: Tom Lindmark

Tom Lindmark — Sat, 28 Jun 2008 06:28:00 +0000

Hi Yves,

I tried to email this to you but can't seem to make it work on your system. I'm probably just too wiped out.

Anyway, I've been in Las Vegas for a conference on distressed real estate. Thought I would go to it to maybe find some deals but found out instead that the whole thing seems to be coming down around our heads. Here is the post I put up quickly tonight and I will try and expand on it tomorrow and Sunday-http://blog.metro-real-estate.com/?p=637.

Things seem to be deteriorating pretty quickly. What's your take?

By: Anonymous

Anonymous — Sat, 28 Jun 2008 03:09:00 +0000

Sy Krass said…

AGAIN! NO MATTER WHO IS IN CHARGE DISASTER WILL STRIKE! The Republicans know nothing, the Democrats know even less about economics. I dare the Democrats to take charge, what will they do? Explode the deficit (if there is any money left to borrow). Neither has the stones to do what’s necessary – cut spending!

By: Anonymous

Anonymous — Sat, 28 Jun 2008 02:41:00 +0000

“The stock market is, by nature, speculation. But the current over-valuation is a bubble.”

And if it is, so what? All bubbles eventually pop and right themselves!

By: Anonymous

Anonymous — Sat, 28 Jun 2008 02:08:00 +0000

The stock market is, by nature, speculation. But the current over-valuation is a bubble.

Supply economics, as supported by "Grandpa" McCain is, the road to income polarization and poverty for an increasing number of Americans.

If we like Latin America, we will love what is in store for us with more Republican (and Dodd-Lieberman) representation.

By: Anonymous

Anonymous — Sat, 28 Jun 2008 01:59:00 +0000

I agree with the anonymous above me. You're getting pain either way, might as well do the right thing. The only problem with that is there is that little thing called an election in November and some pain now might just transfer to votes.

"I think that would torpedo oil prices pretty quickly."

That bill passed in Congress yesterday by a vote of 402-19. It's completely stupid and won't drop the price of a gallon of gas more than 5 cents if that. All the people that speculate the price of oil have to sell at the end. If there's too much oil, wouldn't the holders of the oil scramble downwards to sell? I know some farmers that told me stories of that from years past, why isn't that going on if it's a bubble?

And also, since when did speculation become illegal? Isn't that the entire point of playing the stock market at all, buy a stock and hope it goes up in price?

By: Anonymous

Anonymous — Sat, 28 Jun 2008 01:46:00 +0000

"Some see disaster resulting from the Fed's failure to raise rates"

The problem with grifters (the Bush Administration) is that they make the mark feel as though there is no way out. Of course, the only way out is to take it on the chin and "do the right thing". They may as well.

The Fed is the cause of the serial bubbles. The Administration is the cause of the debt bubble. Either way, the US has to punt.

Let's do it. Pull the trigger. Raise rates to 6 %. Tomorrow.

By: Peter T

Peter T — Fri, 27 Jun 2008 22:05:00 +0000

Long bonds have decreasing yields, unemployment soars, wages don’t increase significantly – this is not a scenario for raising interest rates, and the Fed shouldn’t do so. Americans have lived beyond their means for years and consumed too much oil and imported products, and a gentle slide of the dollar by 50% is one way to correct the problem. Every try to “defend” the dollar, like when the Fed defended the dollar-gold exchange ratio in the 1932 with a hike, would be idiotic, because then the unavoidable decrease in living standard would come through unemployment, and that would be worse.

By: Anonymous

Anonymous — Fri, 27 Jun 2008 21:50:00 +0000

Not only is there no practical solution, anything the government says or does makes matters worse.

The banks will need another (emergency) rate cut soon.

By: Anonymous

Anonymous — Fri, 27 Jun 2008 21:42:00 +0000

Inflation is out of control in Asia, boo hoo. They might want to try running an independent monetary policy.

As for a wage price spiral, what a crock. The power of labor has so diminished since the 1970's that that is simply impossible. For better or worse.

Yes there will be commodity inflation. But with consumers in a savage downturn, there will be no room to raise rates. The long run answer to commodity inflation in this environment of weakened labor is not higher rates, but demand destruction.