Larry Wasserman

High Yield Corporate Spreads Not Yet at Great Depression Levels

Who's writing this stuff, Paulson? This is about as helpful as cracking open a fortune cookie. If you want to try to peer into the future of the financial markets just follow unemployment anbd the rate of inflation. If unemployment continues to rise stocks will go down and spreads on bonds will widen. Unemployment is rising. Inflation is weakening because unemployment is gaining. What you can debate is how much the October stock market crash will affect the psyche of the consumer. If the consumer has been injured emotionally by his loss of paper wealth but is still fundamentally solvent unemployment will rise to 7 or 8 percent, inflation will in turn be dampened and one day people will wake up and see a really cheap stock market and start to buy in -- sending it up and startng a repairative process. If the consumer, like many banks, is FUNDAMENTALLY insolvent due to excessive use of leverage from Greenspan's 1 percent interest rates and disdain for regulation, and since the banks can't lend, then we're in for a downward spiral much like the 1930's which all out government policy can only amerliorate -- not fix.
Welcome too the consequence of Alan Greensopan's unparalled hubris and the learning disabled lack of policy of George W. Bush who was busy guarding mid east oil for the last 8 years. And while turning his back to all spects of domestic oversight, still couldn't find one very tall and distinct looking guy with renal failure -- Osama Bin Laden.