Monday, November 23, 2009

Still Amiss

Things continue to be amiss in the capital market which seems bearish until proven otherwise. Very bullish open today that was slowly sold off. NYSE made a new high but the other indexes got left behind. In fact financials haven't gone anywhere in a couple of months. The market in general has been churning and has felt much more bullish than it actually is.

In general, I haven't seen much of interest to post on lately. It is the same ol same ol. No volume, technical driven rally. Fundamentally, for the time being, nothing seems to matter.

One thing of interest is CDS (credit default swap) of countries has slowly been inching higher (implying higher risk to government debt worldwide) over the last couple of months. I have been watching high yield corporate credit because it usually leads the market. It topped out well before the stock market did in 2007. Is it possible that this won't be the case this time? That it will manifest itself instead in the credit risk of sovereignty's. This could make sense because essentially the risk of the system has been transferred to the sovereign level. It could be the case. Worth watching anyway.

Japan continues its meltdown. There loss economically is others gain, for now. At some point it could be a net negative for the world economy.

1 comment:

Steve said...

I wonder if the credit markets foresaw the Dubai debt debacle?