A Few Comments Before Vacation...

Bear Stearns upgrades Thornburg!  Of all the rumors circulating around, these two come up on the list of most likely to go bankrupt before march options expiration.  I'm sure that Bear Stearns wishes it could upgrade itself, but upgrading Thornburg may be its best second option.  

According to the credit markets section of the Wall Street Journal, the Fed's announcement did very little to improve liquidity in the repo market for anything other than treasuries.  Spreads in the bond market did come in a bit, which is good news, but are still at pretty wide levels.  I'm not sure what they are doing today because my "inside source" is also on vacation!  The big question is, can we make it until March 27th, when the Fed's new program will begin?  Or is some other unexpected blow-up in the wings beforehand?  If spreads start to narrow significantly, I'd guess FNMA and FRE would be a good bet to own.  Why FNMA and FRE and not the brokers?  Because they take just as much risk as the brokers but have a government guarantee!

I'll be out the rest of the week.  Enjoy the markets!  Thanks to all of my loyal supporters (all three of you!)