We are seeing a definite dearth of liquidity in the bond and credit markets these days. It's not just the Xerox's of the world. It seems to us that what we are seeing in credit land is just another step in the liquidity daisy chain. First VC money for questionable business plans simply vanishes from the landscape. Next to go is the high yield sector.
Money becomes unavailable.
The follow on is lower rated corporate paper in terms of liquidity drying up. This is nothing new. We've seen the cycle before. One only has to look back ten short years to the junk bond blowups in the early 1990's. We have one simple question.