I am starting to feel that a short term bottom

has formed. After reading, I start to realize that frozen credit market is due to CDS. Because CDS market is not transparent, no one knows which bank or insurance company wrote/bought what CDS contract. On the other hand, Lehman brother's bankruptcy means a lot of CDS contracts are not honored, and people in financial world do not know who would be victims of those failed CDS contracts written by Lehman or Lehman's counter parties, so banks are not lending to each other because they do not know if counter bank has exposure to Lehman's CDS event. Now that auction on Lehman's CDS has happened on last Friday, a big uncertainty has disappeared, hence a short term bottom should be there. Just a guess.

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• please check T-Bill yield to confirm if credit -longtermInvestor- ♂ (35 bytes) () 10/12/2008 postreply 19:20:23

• should watch TED spread, once which starts to decline -洋葱头儿妈妈- ♀ (262 bytes) () 10/12/2008 postreply 20:50:56

• Where do you see the latest TED spread chart -lujizize- ♀ (0 bytes) () 10/12/2008 postreply 21:30:32

• 很多指标失效了，但一个指标还没有 -谷米- ♀ (202 bytes) () 10/12/2008 postreply 20:39:38

• for longterm, it is up to real economy which -longtermInvestor- ♂ (64 bytes) () 10/12/2008 postreply 20:59:06

• Now US market is total driven by rumors, partially correct info. -luxh008- ♀ (0 bytes) () 10/13/2008 postreply 04:45:03

• If today has a huge rally, it may last 2 days. -luxh008- ♀ (112 bytes) () 10/13/2008 postreply 04:38:40