re: MileHigh Financial Armageddon - back to level 2

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Winner gets to frick jim cramer

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Seriously though, all the spreads are retreating, even with LIBOR rates beginning to normalize. MH did you read that AtC post yesterday about negative swap spreads? LINK

Probably a warning shot.

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I have learned ALOT about the credit markets over the last 6 months (I was largely ignorant behind bond basics). But there is a lot to learn, so its hard for me to determine what some of these things mean.

I understand what the negative piece means, but not sure how bad a news that is. I think there is a lot of panic trades in both the bond and stock markets at the moment.

Quite possibly. Depends on birth/death model. I wish the vix wasn't so high.

At some point the average joe is going to go WTF! I think its happened to some extent, but its getting worse by the week.

Xmas season is going to suck.

Again, I wish the vix was lower.

My expectation is for bed, bath, beyond, circuit city, possibly the limited, and many other marginal chain stores to go WUMP in Feb.

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Seriously though, all the spreads are retreating, even with LIBOR rates beginning to normalize.

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Yes they are which is positive, but what seems to be lost by the goldilocks is that the normalization of an orderly credit market may be positive, but the underlying cause of the crisis still remains an overextended saturated credit market, particularly at the consumer level. Consumer credit contraction is inevitable and every 'solution' seems to be fighting against this trend in hopes of furthering borrowing (which ironically is what got us here). Until there is acceptance of credit contraction and the need for savings.... the worse for main street is still ahead.

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I wonder what % of retailers depend on the holiday sales to make their year a profitable one?

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99%
Why do you think they call the day after thanksgiving Black Friday?

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Quite possibly. Depends on birth/death model.

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That shite is so bogus too. I would feel more comfortable about putting money on CC going under within 5 months than I would on me getting home without getting in a wreck.

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Yes they are which is positive,

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Igor I meant they were retreating in the sense that today they are blowing out and getting worse, not getting better (unfortunately). That article earlier about a negative swap spread on the 30yr is scary stuff.

The only positive from this week has been settlement of CDS, which I think is absolutely worth noting. Other than that, almost all the ground made up in benchmark spreads looks to have retreated significantly. Imminent meltdown? I don't think so, I think it is a reaction to worldwide selloffs, crazy currency movement and intervention, hedge fund liquidation (most responsible for all the volatility recently imo but nothing to back this up just speculation). Not to mention that, with the exception of maybe one earnings report, every single one I read was starkly negative. shite, between GS, Chrysler, and Yahoo alone they're shedding 35,000 jobs next month. Still hoping we don't get Japan'd.

LINK

I'm a say they go down next week, that should help smooth things over a little more eh.