I found that little data point interesting in a bloomberg article. Not sure what time that is of but Wall St. is entering a stand still. 35% decline is huge!!
Interesting that I didn't get text messages, emails, and phone calls from all my bearish friends complaining that the market is down while Fannie and Freddie are way up when last week I was barraged with such when Fannie and Freddie were way down and the market wasn't following. Like I said last week the base case of the equity get wiped out is a non event at this point I think. What matters is the preferred, debt, and the structure. The common is just a trading vehicle.
Interesting the market is down today. It makes me kind of think that the street was expecting or pricing in some kind of big news over the weekend on the GSEs or Lehman to take out some of the unknown. When that didn't happen the market sold of. Just theorizing.
3 comments:
Yeah, at this point, Fannie and Freddie are so low now that a large % move only takes pennies... there's hardly any market cap left.
Sooner or later equities should follow debt markets, just theorizing. there are many explanations trying to fit ones desires but the downtrend is regaining strength. Dollar strength is illusional just as the us economy will be more resilient than the rest of the world. This is nonsense, paytime arrives.
Agree, the equity markets will follow the debt markets in a major way. The debt markets are pricing in a severe recession. The equity markets are pricing in slow growth. Something has to give.
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