Weaker corporate bond prices suggest the debt market is growing concerned about corporate earnings in the second half of the year
Peter Oberois
May 7, 2007

Corporate bond prices and junk bonds are showing signs of extreme vulnerability. These sensitive financial instruments always predict a recession earlier than the leading economic indicators. The corporate profit may tumble by end of the year.

The stock market’s recent rise is based on past performance surprises. What will happen in the second half of the year is dependent on many factors including the weakness in the housing sector, the stagnation in productivity, rising cost of outsourcing and in general lack of buying power among the consumers and the corporations.

Stock market has disconnected itself with the reality. These has happened many times before when excessive liquidity in the hands of a few find no place to go but to chase the big name stocks. It is commonly known as divergence in the market. Divergences eventually get corrected through nasty and lengthy bear markets or sharp drop in market prices.

The Treasury bonds can rise handsomely this weak with overall bearish news on the economy
Sam Adelton
. The massive jump in Treasury prices will happen between now and the end of the year as Fed finally realizes they are trapped by deflation like never before since 1929-33 Great Depression.
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News this week shows economy is headed for a deep recession slowly but steadily – time to buy bonds an sell stocks
Sam Adelton
When Nikkei was in upper 40,000s and was rising every day, no one could believe Nikkei will fall below 10,000, Japanese economy will hit by deflation and after twenty years, Nikkei is still below 18,000.
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The collapsing mortgage market loss can total more than a trillion dollar by the end of the year =-what’s the impact on stocks, bonds and currencies?
Fred Day
The mortgage bankers scared like never before. The real estate collapse has just started. The artificial liquidity was unable to hold the real estate market any further.
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News on corporate take over deals reaching options floor a few days before actual signing of the deal and breaking news - worst insider scandals in the history of the stock market?
Alan Hershey
It is the responsibility for the stock exchanges and options exchanges to control and notify the SEC of such happening. They did not. Some are saying the stock exchanges themselves are involved in the scam.
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Weaker corporate bond prices suggest the debt market is growing concerned about corporate earnings in the second half of the year
Peter Oberois
It is commonly known as divergence in the market. Divergences eventually get corrected through nasty and lengthy bear markets or sharp drop in market prices.
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French unrest with conservative leadership may be a reason for selling Euros
Karen Zuba
The turmoil will spread into other parts of the Euro zone damaging the economics of the region. It is time for selling the Euro.
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The lack of job growth spreads beyond homebuilders – deflation in full control as mortgage defaults skyrocket
Peter Oberois
The artificial liquidity created in the last six years has hidden the stealth deflation within the economy. The employment data finally confirms that the stagflation that started in 1981 has now slowly turned into a deflation.
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