Is there a medical professional that wants to step out in front of a TV when this moment happens and give a prognosis of the patient?

Would you like that popcorn with extra butter?

Guys, we haven’t even started to deleverage yet in the official metrics. This is just the pain of deceleration.

We just got one of those boilerplate letters in the mail with the monthly Citi mastercard bill.

"We are changing your Card Agreement….We are changing the following sections regarding APRs:

Default APR. The default APR equals the greater of (1) the Libor Rate plus up to 26.99% or (2) up to 29.99%.

Yeehah! Give'em another $20billion, Hank & Timmy!

But, but, but I was watching CNBC Closing Bell and I heard a guest saying that we were in the 7th inning of a 9 inning ballgame! Sounds like things are going to get better from here on out.

[rolol]

http://online.wsj.com/mdc/public/page/2_3022-bondbnchmrk.html?mod=topnav_2_3000

Lots of nice expanding spreads for junk yields, and IMHO, this goes back to a thing I posted here about a month ago:

From Yves meets Doc link:

Hussman Sees Trouble Ahead
http://www.usnews.com/blogs/the-ticker/2008/08/26/hussman-sees-trouble-ahead.html

Years ago, Larry Williams used to look for a situation he called the “Jaws of Death”—noting that when bond prices were weakening but stock prices were strengthening, the two differing trends opened a set of “jaws” that tended to snap shut, usually due to abrupt weakness in stocks.

He points to expectations for lower volatility in the stock market (measured by the VIX index) at a time when credit markets are getting more worried. See the chart below:

Those jaws could be setting markets up for a tough reckoning. Let’s give Hussman the last word:

In short, the markets are presently trading on a theme that largely overlooks the potential (and in my view, the reality) of a significant U.S. recession. At the point of recognition, we may very well observe abrupt weakness in both stock prices and the U.S. dollar.

http://www.nakedcapitalism.com/2008/08/fannie-freddie-sale-goes-well.html

Over and out, copy?

http://finance.yahoo.com/q/bc?s=%5ETNX

Days range = 3.058 – 3.264

As for as 10-year treasury Constant Maturity, the range we are in now, goes back yield wise to about June 1958 and a period of low yields that go back beyond 1953:

http://www.economagic.com/em-cgi/data.exe/fedbog/tcm10y

What does it imply?

http://research.stlouisfed.org/fred2/series/DGS10

> Paul Krugman says:
Don't panic about the stock market…Panic about the credit markets instead. Interest rate on 3-month Treasuries at 0.02%; interest rate on high-yield (junk) bonds over 20%.

http://krugman.blogs.nytimes.com/2008/11/20/dont-panic-about-the-stock-market/

The 30-year yield tumbled 46 basis points to 3.46 percent, the biggest drop on record. The yield is the lowest since regular sales started in 1977. Yields on five-year notes declined to 1.88 percent, not seen since 1954, according to data compiled by Bloomberg and the Fed.

Direct Correlation
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSQiBCOuoGGM&refer=home

The Standard & Poor’s 500 extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history. The S&P declined 6.7 percent to 752.44.

“Bond yields, we feel, are somewhat distorted by what’s happening in the derivatives market,” said Chris Ahrens, an interest-rate strategist at UBS Securities LLC in Greenwich, Connecticut, one of 17 primary dealers that trade with the Fed.

“Changing the terms of the TARP as suddenly as he did undermined investor confidence,” said Richard Schlanger, a bond fund manager in Boston at Pioneer Investments, which oversees $44 billion. “It’s a frightening situation.”

“You have the cloak of a declining inflationary environment,” said Tom Tucci, head of U.S. government bond trading in New York at RBC Capital Markets, the investment- banking arm of Canada’s biggest lender. “People are denying it, but we are mirroring the whole Japanese situation and if that’s the case interest rates are going to go a lot lower.”

>> On topic, will this add to FDIC failures — yah think???

“Neal, we’re out of propane!” I figured he was experiencing personal financial stress and I offered some consolation. “No, we’re out! Everybody’s out … all three elevators in the area can’t get fuel to dry the corn crop.” Their crop is coming in wet this year, 22% moisture as opposed to the more normal 18%, and it must be dried to 13% or 14% for storage no propane at this time of year means crops left standing in the field overwinter with the hopes of harvesting in spring. Today I happened to talk to one of the staffers who works for Steve King, IA-05’s Congressman, and he confirmed that this is a systemic problem – a friend in the region with a propane business is running trucks all over to get enough fuel for the elevators they service.

http://theautomaticearth.blogspot.com/