Oracle, Cytec and MetLife are all in the market with new issues today; their timing is likely inspired by the demand for FRTEL.
Bloomberg has an interesting article about correlations amongst different sectors being at all time highs. This is largely echoed in our most watched pair of the S&P vs CDX which over the last 3 months have moved largely in lock step. The only slight outlier seems to be the NASDAQ 100 which credit spreads 'predict' should be lower at ~1440. We've learned that correlation can spike during a crisis....but how should we react when they climb during a rally?
Remember, in a true OTC market like the credit market, if desks are lightly staffed like they are during this holiday week, volumes will remain very subdued (down ~20-30%)...credit trading is neither automated nor scalable. The large bulk of trading this week is month end index rebalancing (i.e. not driven by rational economic price taking). In the old days of 2 years ago, this period was typically dominated by the street lightening up their balance sheets....but now balance sheets are down 60-70% so the impact is obviously less.
Given all the recent chatter about rising commodities, I was a bit surprised by the headline that Euro-zone inflation may have a negative rate.
This may not surprise the mortgage folks, but I was stunned to learn that 28% of all mortgage defaults (65% of all subprime mortgage defaults) started out as prime mortgages.
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