wixeywaxy

High Yield Corporate Spreads Decline 6%

While everyone is mentioning the increased spread, I don't see them pointing out that only effects new transactions. The holders of these junk bonds are still getting the same return and will not be marking them down to market. Of course if an institution goes bankrupt, it must then mark to market. My question is, are we making too much out of the problems. Most people aren't defaulting on their mortages, even the sub prime ones, and most institutions holding them won't fold even if they have some asset impairment. The credit crunch will pass very quickly and those foolishly selling into the hysteria are making a mistake. Vic