Anyone with a pulse?
Credit Markets are hitting new lower lows. Many classes affected including investment grade stuff. Once you factor swaps, we are talking about multiple times larger market compared to the equity markets.
If Credit Instruments are declining in value, and they are leveraged, you would think that potential margin calls could have a cross over effect on equity markets. Further, it is these instruments that make up the reserves or our financial system.....if we are hitting lows, could these reserves falling to dangerously low levels.
Basic logic, if the largest asset class in the world, debt instruments and the derivitives are crashing, what can we say about what is likely to happen to equity markets?
Just a seperate thought:
How can retail sales be up and California sales tax be DOWN 9.7%?