Wednesday, April 02, 2008

The new decoupling - Bod Fox says...stare at this chart and you'll get it

The new decoupling

Credit from equity. It’s not a new concept but haven’t yet seen it represented as neatly as in this graph.

1001.jpg

The team at Bank of America have produced this effort, which shows just how richly equities are trading on a historical basis relative to credit spreads. Credit, they add, appears to have overshot.

But they fear that further significant government intervention, say to stem the downwards spiral of US house prices, may come only after a greater hit to the market most watched by policy makers - stocks.

No comments:

Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.