Existing home sales in the US were well above estimates driving stocks higher which in turn has credit spreads doing better this morning. While many are citing (whining?) about volatility in spreads being exacerbated by low secondary volume, the TRACE data shows that it's down only slightly. That being said, the tech/media/telecom names do seem to be gapping tighter on few actual trades.

Half of the recent mutual fund flow data was a continuation of recent trends; positive flows into high grade bond funds and outflows out of money market funds. However, it was a bit of a surprise to see both high yield bond and equity funds have outflows.

Earlier this week, I mentioned how a FAS ruling about off balance sheet securitization (being reversed) may hurt the banks. Apparently the FDIC is quite concerned about the impact as well...."the timing gives me heartburn" said their chief here.

Earlier this month, I had a post about prime mortgage borrowers defaulting at a higher rate than sub-prime borrowers. Here's more on that alarming trend from the Mortgage Bankers Association (tip from FT Alphaville).

Apparently, mom and pop can now 'hedge' (or speculate on) their real estate risk. Read about it in this Economist article.

The fact that corporate treasurers are being conservative with their balance sheets right now should not surprise anyone. This WSJ article will add some more data points to the argument.

The Vix has now had 7 days of opening up higher and closing lower....today's open was lower however. So much for my prediction that a base was forming....

Zerohedge points out that Goldman CDS has widened from ~100bps to ~150bps during August while the stock is about unchanged over the same time frame. Looking at a broader 3 month regression tells the same story (stock 'should be' lower or the CDS tighter) but with a weak R squared (~.51).