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TMFAleph1 (94.91)

5 Signs Irrational Exuberance Is Back

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October 15, 2009 – Comments (2) | RELATED TICKERS: KO , WMT , XOM

At a time when many pundits or "investors" are grasping at straws to justify the market's run, I'm seeing an increasing number of buds of "irrational exuberance" (in the words of the maestro bubble-blower Alan Greenspan). It's as if the crisis was a sharp but fleeting pain that investors wish to relegate to the status of a bad memory. [More]

2 Comments – Post Your Own

#1) On October 15, 2009 at 11:29 AM, TMFDeej (99.43) wrote:

Hey Alex.  My favorite sign that irrational exuberance is back is interest rates on corporate bonds.  I was big into bonds a number of years ago and found myself buying less and less as we approached the peak of the market in 2007 and 2008...to the point that I wasn't buying any.

Credit spreads exploded during the height of the credit crunch and I was snapping up corporate debt hand over fist.  As someone who is looking for attractive yields, I often peruse the available bond issues and over the past several months the rates are absolutely terrible.  Once again I cannot justify buying corporate paper.

This leads me to believe that people are nor nearly as risk averse in the current environment as they should be.

Deej

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#2) On October 15, 2009 at 11:52 AM, TMFAleph1 (94.91) wrote:

@Deej,

Thanks for your interest. You're right, high-yield isn't the only segment of the bond market that has had a good run -- the borrowing cost for U.S. companies is lower now than it has been in approximately 16 months.

Regards,

Alex D

Tracking Bond Benchmarks

 

 

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