Musical Chairs
14th February 2008
The credit crunch just doesn’t stop. I had never heard of an SIV until 6 months ago. I had never heard of Auction Rate Securities or Tender Option Bonds until today. What is next? What kind of poison can these PhD’s and Quant’s come up with next? As a treasury trader, I am on the front line of this credit crunch. For months, the bond market has been in total chaos. Eventually, this has to spread into the stock market. It is only a matter of time. The FED can keep lowering rates but its not going to fix this. Look at the seizure in these new instruments over the past few days even after the fed has lowered the fed funds by 1 1/4%. This is not over. Stay defensive.
- BA