> [anyone know what they mean in the last
sentence, "reduced supply" of what? "wider spreads" with between corp bonds
and treasuries? I just read today that spreads had tightened. I assume this
announcement means the 30-yr will
be back pretty soon.]
>Turning to the current state of financial markets, the advisory group said
that conditions have "worsened noticeably" in recent months, with wider
spreads and reduced supply, and that "a higher level of volatility is probably
a permanent feature of the credit markets."
>
I would guess they are talking about spreads on interest rate swaps, the
derivative markets for which are crucial to banks liquidity. Treasury Dept.
and big banks have begun to worry about the reduction in market activity for
them, the WSJ said the other day.
Christian
