Re: Bond Trading
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Personally, we are not out of the woods yet. I think certain Hedge funds that are yet to mark their holdings to the market will more than likely become insolvent. In other words it will get worse before it gets better. There is just a complete buyers strike in certain parts( ie. pretty much anything other than treasury's) of the debt markets. Bids are consistently getting lowered to find buyers.
Till tomorrow........
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This is also what I was getting at with my intial explanation for why I made the trade on the Countrywide bond. I didn't word it properly, but the gist of my trade (more properly laid out now) is the following:
Cuontrywide's situation (bond prices), though undoubtly a bit gloomy, has been influenced by more than just their credit worthiness. I believe the hype about them has driven people away from their bonds (thus increasing the yield as people want to sell them off), I believe that the Fed lowering rates will help to ease the outlook on countrywide (bringing the bond prices back up), and then Countrywide's situation will improve (also bringing the bond prices back up.
I definitely explained things differently earlier but this wording is much better. Anyways, cross your fingers for my first bond trade!
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