Market Soapbox 03/12/07
MON, broadbased up day, DJIA +42 on lower volume with decent internals. All UP cept XOI. Bonds up 10 yr yield -4 bps 4.55, $ down vs 1.319E & vs 117.64Y, WTI crude down 1.8% $58.94, gold up $651.50.
The BOJ raises 25 bps, carry trades unwind, housing teetering over a deep precipice and the emasculated economy about to take a nap...
an even louder alarm, may be coming from a market event that didn't happen: Not a single high yield bond issuer defaulted in February, the first time that's occurred in at least seven years.
High-yield bonds are supposed to be risky, but risk evidently isn't what it used to be. This upsets portfolio diversification, the balance between investment risk and reward.
As a result, investors are being exposed to an even greater danger, that their portfolios won't be diversified enough to shield them from an unwelcome market shock.
Countrywide (CFC) said in an update that it expects some short-term earnings volatility as a result of the changes in the subprime mortgage marketplace.
New Century Financial (NEW) disclosed it has received notice from its lenders that they are discontinuing their financing under the company's short-term repurchase agreements and aggregation credit facilities.
More short covering surge tomorrow, tailing off with PPI & CPI Friday, Monday FOMC & bad housing news, perhaps even New Century filing BK and a fall from SP500 1418-1428 commences.
The BOJ raises 25 bps, carry trades unwind, housing teetering over a deep precipice and the emasculated economy about to take a nap...
an even louder alarm, may be coming from a market event that didn't happen: Not a single high yield bond issuer defaulted in February, the first time that's occurred in at least seven years.
High-yield bonds are supposed to be risky, but risk evidently isn't what it used to be. This upsets portfolio diversification, the balance between investment risk and reward.
As a result, investors are being exposed to an even greater danger, that their portfolios won't be diversified enough to shield them from an unwelcome market shock.
Countrywide (CFC) said in an update that it expects some short-term earnings volatility as a result of the changes in the subprime mortgage marketplace.
New Century Financial (NEW) disclosed it has received notice from its lenders that they are discontinuing their financing under the company's short-term repurchase agreements and aggregation credit facilities.
More short covering surge tomorrow, tailing off with PPI & CPI Friday, Monday FOMC & bad housing news, perhaps even New Century filing BK and a fall from SP500 1418-1428 commences.
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