The premiums that many corporations have to pay to Treasuries are even more burdensome from a historical perspective, and emerging markets, well. The banking sector in general is way under performing the other equity indices which indicates all is not quite right in the U.S economy, or even healthy. Remember, we have had 3 dramatic rate cuts. You will soon hear more about this from our own Charles Peabody who has been heralded by Alan Abelson, Editor in Chief of Barrons, on this subject. Deflation is having a dramatic impact and this deflation is becoming the ruination of credit.
Debts get harder and harder to be repaid.
As a result, you have bankruptcies in Asia, excess commodity supplies hit the market as cash becomes essential and only the holiest can obtain credit on favorable terms, if they can get it at all. Our crystal ball says, a serious credit crunch and strangle of the market place will be upon the world in the near future. It is hard to think that way with such booming stock markets. But, we see it coming. And with it, we see a kaboom.