Global equity weakness, Geithner's comments about possible further 'large amounts' of assistance, and the rising inevitability of GM and DCX bankruptcy have created an understandably foul mood.
GM bonds are currently about $3 lower on the news.
Some strategists are citing a tepid G20 statement as further reason for weakness but I cannot recall even once in my career a G7 or G20 comment even tipping the needle.
I'm encouraged by some preliminary signs of risk taking by the broker/dealers. Goldman entered a swap agreement with Lincoln National that helped boost their statutory capital. The equity markets don't like this as the previous option had been raising government guaranteed debt.
Swap spreads are mixed and while the Vix remains rangebound, it's moving higher.
New issue supply will end the month at ~$60B (non guaranteed)....so far, nothing on the docket today with the spread weakness. The recent pharma new issues are weaker today after strong performance of late.
Greenspan wrote an interesting, and verbose, editorial in the FT about how equity recovery is coming and will help the global economy immensely.
DTCC data shows single name CDS net outstanding shrinking over the last 4 weeks while index outstanding continues to rise.
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