It didn't surprise me at all that there was a reversal, but today the foundation for my comments months ago is even stronger. Inflation is non-existent. Real interest rates in the U.S. are among the highest in the world. The Fed understands this economy and they won't let it slip into recession without a fight. Liquidity in key markets is as poor as has been seen in years.
Nobody wants any extra positions on their books at year-end.
This is not junk we're talking about, but good quality corporate paper. Illiquidity mixed with uncertainty is a bad combination. If another shock hits the global markets in the next seven weeks there will be an absence of bids that will be staggering. The shock doesn't have to be as severe as a Russian default, either. We are in extremely fragile territory in the short run.