I am mailing myself to Hawaii.

Remember to do your part and buy local.

You want to be worried, that fall in the dollar looks mighty concerning too.

I like how stupid CNBC is- they show that stupid oil price falling every fricking day, yet it never really falls.

Look at Brent go up!!!

We really are a populace of simpletons.

The dollar is going to have to drop by 30%- and the rest of the world had better get ready for it, because that kind of realignment will make or break fortunes.

Someday this war's gonna end...

22.6% free fall in global cargo is unprecedented and shocking.

How did he miss the trucking data from yesterday?

Baltic dry down by 90%. Trucking 11%. Air cargo 22%.

Rail anyone ?

would be interesting to hear from someone in Nevada or Arizona where they mothball planes in the dry desert

how often does google earth update?

Sebastian's Dad writes:
My son tells me it's a good time to buy stock in airlines.

Buy him a one way ticket somewhere... just kidding..

“2009 is shaping up to be one of the toughest years ever for international aviation...the last time it was this bad, Icarus's wings melted."

Nostrovia,

So Chesley Sullenberger, your next assignment is.........

Interesting. Does anyone know what this super-valuable cargo is? Microchips and pharmaceuticals?
Beddict and Bugg, PLC
.
Organs?

Dose this mean they're going to use my pony to start delivering stuff again?

Nostrovia,

Interesting. Does anyone know what this super-valuable cargo is? Microchips and pharmaceuticals?
Beddict and Bugg, PLC | 01.29.09 - 3:13 pm | #

That and expensive machined parts & assemblies, iPod like stuff and even 'food' - like salmon.

And also stuff that is late [say to avoid shutting down a production line].

Expensive stuff.

They don't ship coal or corn or oil [cheap commodities].

Somali's need an air force.

http://bloomberg.com/markets/rat...ates/ index.html

Mexican standoff with bond vigilantes and Fed.

Is it time to buy some TLT calls again?

Bob Dobbs,

"There's also a pretty large surplus airliner park out at Mojave. Somebody must live near there; is it getting bigger."

You know who lives there Dope!

Nostrovia,

For the slow food and buy local folks (like me), this is great news.

Maybe it also means we'll be teaching US citizens and not so many foreigners too.

sidd(Unrated) writes:
Baltic dry down by 90%. Trucking 11%. Air cargo 22%.
Rail anyone ?

Baltic Dry is actually staging a mild recovery. It is like 35% off its lows. Of course, don't ask how far off its highs it is.

Railfax Report - North American Rail Freight Traffic Carloading Report

There is rail. The four week rolling metals average says it all, I think.

Does anyone know what this super-valuable cargo is?
Beddict and Bugg, PLC | 01.29.09 - 3:13 pm | #

Apple products.... (I'm baised)

Rail anyone ?

Railfax Report - North American Rail Freight Traffic Carloading Report 

Air cargo carries 35% of the value of goods traded internationally.

Interesting. Does anyone know what this super-valuable cargo is? Microchips and pharmaceuticals?
Beddict and Bugg, PLC | 01.29.09 - 3:13 pm | #

Anything that's light, high-value and needs to get there in a hurry.  I ordered an Airport router from the Apple Store that airshipped straight from Shanghai.  Also compact high-end consumer electronics (expensive video cameras), live seafood (how you get live Maine lobster in Los Angeles), you name it.  I've eaten Dutch-raised tomatoes that were hot-house grown inside the grounds of that giant airport near  Amsterdam and retailed in markets on the West Coast. Hell, even race horses.

Last I knew air fright didn't create or destroy money.
dryfly | 01.29.09 - 3:20 pm | #

I'll behave now.....

Beddict and Bugg, PLC

Ships take the heavy/bulky freight. Doesn't cost much by air per unit of light stuff. Air also has a shorter delivery lead time

Consumer electronics, clothing, books, cosmetics, small scale orders of auto parts, pharma (it's cheaper than having to warehouse a buffer supply domestically in between shipments), live animals, lost passenger luggage ...

so anything that is high value to weight/size, values time, and can save on warehousing

or about 85% of whatever they sell in your local mall

very good for the climate.
Matti Kinnunen

Fast forward to 2011:

Average Annual Temperatures Drop 4C Amidst Global Economic Collapse - Climatologists Warn of Global Cooling Threat

August Retail Sales Plunge Due to Unseasonably Cool Weather, Economists Say

Former Central Banker Found Dead on Park Bench from Self-Inflicted Gun Shot Wound

Former President George W. Bush Wins Nobel Prize in Economics

Interesting. Does anyone know what this super-valuable cargo is?
Beddict and Bugg, PLC | 01.29.09 - 3:13 pm | #

A lot of perishables.

Lobster, for instance.

Spatch - thakx!

lotsa cliff diving!

"Last I knew air fright didn't create or destroy money."

That's helicopter work.

Nostrovia,

this may be more about lack of credit to cover cost of goods - recall LOCs went nuts in Nov/Dec.

That's helicopter work.
Comrade Misean is Dope | 01.29.09 - 3:26 pm | #

should have read "+1"

....................

That's helicopter work.
Comrade Misean is Dope | 01.29.09 - 3:26 pm | #

LOL. Paging Pilot Ben, paging Pilot Ben... your shipment is waiting at Hanger 10.... the BIG hanger.

If we build up enough 'inflationary pressure' via stimulus & intervention countering the deflationary pressure then something is going to blow. It's almost like tectonics.
dryfly | 01.29.09 - 3:27 pm | #

What do you think about this play: long TIPS / short Treasuries (from poster Jake at AI)

"and ultra-specialized moves of things like plane wings."

It's my understanding, that, yes, the wings are sort of a requirement.

Nostrovia,

found this from a UPS driver friend of mine.

now with the economy in the toilets, they're forced to using ground.

Also, from a FedEx guy I know, they've been instructed to not deliver packages BEFORE they're supposed to get there - seems folks figured out you could pay for 2 day and often get it next day anyway. No more.

I agree with Citizen AllenM.

The only way out of this mess, is if USD is allowed to drop 30%.

This will reset our labor cost and reverse outsourcing and offshoring, starting at high end items & services. (I don't think you'll ever find low end items being manufactured in the USA again)

In other words, on average, "other" currencies have to get stronger by 30%.

Key question is who will allow their own currency to get stronger by 30% in this environment? You can bet China/Russia/Asian Countries/etc will fight tooth and nail to maintain their pegs.

As long as the pegs exist, the recovery won't happen, jobs won't return and trade won't grow.

What do you think about this play: long TIPS / short Treasuries (from poster Jake at AI)
nades | Homepage | 01.29.09 - 3:32 pm | #

Makes sense to me, put my Mom 1/2 into TIPS a few months ago (among her TIAA-CREF choices)

And what happens to Boeing, Airbus, etc. workers and their families?
scone | 01.29.09 - 3:29 pm | #

FYI - I just landed a contract to make parts for cargo bays in airplanes. I beat out a number of companies that used higher volume production methods. The competition's process made parts faster but they needed to run much larger batches and lot sizes to be cost effective - we are not competitive at those high volumes but beat their pants off at low volumes, smaller lot sizes. Now I know why we won the order - the OEM was looking at their forecast for the next 2-3 years and saw nothing but lower volumes. They didn't share that but I know that is what happened.

What do you think about this play: long TIPS / short Treasuries (from poster Jake at AI )
nades | Homepage | 01.29.09 - 3:32 pm | #

I think shorting something that the Fed has indicated they may buy in quantity is a questionable strategy.

As to being shocked, at Costco today in Atlanta, they were selling prime ribeyes for $7.99/lb. I've never seen prime grade beef there before... are farmers dumping even more cattle now in fly-over country than they did last fall?
One Hot Chick
.
I suspect restaurants are dying, not buying prime rib. That's true here in Portland, OR. at least.

This can't be what the Federal Reserve wants to see:

Inflation worry sparks new strategies, share classes
Some managers adjust amid concern about currency devaluation

This is why I think it's a losing strategy trying to manage an economy by trying to outsmart people or force them to do irrational things (like hold money while you're devaluing it).

I think it's critical to find ways to structure the economy so people can be informed and rational while still being socially constructive.

You can't bank your future on people being mindlessly and passively compliant.

I think shorting something that the Fed has indicated they may buy in quantity is a questionable strategy.
MLM | Homepage | 01.29.09 - 3:37 pm | #

Good point.  But it also makes me wonder how on earth they think they are going to control the yield curve while they are monitizing.... Doesnt seem possible to me....

It's Lieutenant Hurwitz. Severe shell-shock. Thinks he's Ethel Merman.

Well, you know what they say... ... See a broad to get that booty at 'em -- lay 'er down 'n smack 'em yak 'em!

The only way out of this mess, is if USD is allowed to drop 30%.
hc

I think some kind of devaluation on the order of 50% may be necessary for the US economy to survive.

The question is can we survive that kind of devaluation or does it cause a capital flight that makes things even worse.

Thanks scone,
I didn't think about the decreased restaurant demand.
One Hot Chick

hc and AllenM:

Listened to Roubini on Bloomberg radio podcast this morning. He agrees that the US needs a weak dollar to help rebalance the current account deficit through higher exports. But with all other markets also trying to stimulate exports, he sees a "race to the bottom".

Everyone's looking for customers now that the US consumer has finally rolled over. Not sure there are any right now.

ac - I think everybody is on the race down. But a 50% haircut for the USD?

I'm down 35% since this kicked off... If I can beat inflation then I win!
nades

How on earth can you be down?

As to being shocked, at Costco today in Atlanta, they were selling prime ribeyes for $7.99/lb. I've never seen prime grade beef there before... are farmers dumping even more cattle now in fly-over country than they did last fall?
One Hot Chick
.
I suspect restaurants are dying, not buying prime rib. That's true here in Portland, OR. at least.
scone | 01.29.09 - 3:38 pm | #

I did see an interview on TV with the CEO of Costco talking about the advantages of the current economic situation -- and he specifically said that Costco was now able to sell prime beef because restaurants were no longer sucking up so much of the supply.

But it also makes me wonder how on earth they think they are going to control the yield curve while they are monitizing....
nades | Homepage | 01.29.09 - 3:41 pm | #

I've been thinking about this for a while.  My assumption is that the Fed can control any rate they choose, right down until the dollar isn't worth the bytes it's printed on.  However, any rate they aren't printing to hold down will blow out with a vengeance.

ac
The only question is how much capital flight

There has to be a plausible proposition to retain wealth and that doesn't exist with the necessary adjustment

Why does China need so many treasuries if the US doesn't buy for a couple years at least

The same reason as Russia is why...

Operation Twist 2

Comrade Byzantine_Ruins

Unless I read it wrong - rail traffic is going up. It is still below what it should be. Perhaps seasonal?

I remember reading that most US roses are flown in from Israel.

I know I never see UPS or Fedex in my neighborhood anymore.

"can someone summarize the last 5,280 comments?"

Doomed! Doomed I say!

Correction/Addition to previous comment

deflation is STILL on the loose ... and "Depression" is no longer a dirty word.

Summary of last 5280 comments: Deflation is on the loose.
Wisdom Speaker | Homepage | 01.29.09 - 3:52 pm | #

Deflation as far as the eye can see, and yet people still scared of inflation.

"I had to do something...can someone summarize the last 5,280 comments?
crispy&cole | Homepage | 01.29.09 - 3:51 pm | # "

A politician's answer would be "All of the above".

That's getting harder to do as confidence in governments, currencies, and central banks declines.
ac

This to me is where it is falling apart. Confidence. This of course leads to fear and panic. There is always some retoric about fat bankers and greedy critters but the tone and volume has gone up a lot. And not just in the US. I think the biggest fear for critters is lots of unemployed people not because they may be hungry but rather they can get their hands on pitchforks. the Iceland syndrome is alive and well.

I have no idea how you safely trade or invest in this environment with any hope of retaining your wealth... I think if you get through this period w/ 50% of your wealth intact - in real terms - you will have won. Even if you come out w/ 25% you might be lucky. It's that uncertain - that bad.
dryfly | 01.29.09 - 3:44 pm | #

I completely agree dryfly.  This isn't an environment where anyone should be trying to "make" money.  They should be doing their best not to lose it.

POIC

The i-Bond yields are great in current circumstances. But aren't the limits like $20K max or something.

We've got the equity from our home sale last year parked in a high yield savings account earning 4% APY. That was a promotional rate that expires Jan 31st, so I'll be shopping for another high yield savings or short term CD. Still seeing many banks paying 3%+ on short term, FDIC insured accounts. That's my strategy until there's more clarity on inflation and rates.

Take it for what you paid for it.

crispy&cole writes:
I had to do something...can someone summarize the last 5,280 comments?
.
Handbasket --> Hell

"The life of everyone on board depends upon just one thing: finding someone back there who can not only fly this plane, but who didn't have fish for dinner."

Uh - that would be me.

However, any rate they aren't printing to hold down will blow out with a vengeance.
MLM | Homepage | 01.29.09 - 3:51 pm | #

Thats kinda what I was thinking.  Printing for rates seems like circular reasoning to me....

..................

Deflation as far as the eye can see, and yet people still scared of inflation.
ille_vir | 01.29.09 - 3:53 pm | #

In a fiat system they OUGHT to be.

@Trotsky: "Crispy, spending 150 million on a party is shameful."

Mainly funded by donors... many of whom got it in the form of ($18B) Wall Street bonuses... which was TARP money ($350B) that kept their banks from blowing up.

The NeoCon wingnuts probably blew a gasket that 0.05% of the TARP money was recycled into a Democratic inaguration party...

BTW anyone seriously suggesting the US 'peg' to the EU needs to consider what pegging means... (1) we first have to run surpluses and then (2) we would need to save to be able to buy EU assets to maintain the peg. Anyone besides me see a problem with that?

Pegs aren't 'free'...

I'm off. So long dudes, dudettes and those vacillating in between (and you wondered how the Vasoline brand was ever started, huh!)

"Also, from a FedEx guy I know, they've been instructed to not deliver packages BEFORE they're supposed to get there - seems folks figured out you could pay for 2 day and often get it next day anyway."

UPS hasn't figured that out yet. Bought exercise bike from Amazon. Free shipping for 5-8 day ground. Came next day.

Pissed Off In California,
It's "Action" time here.

dryfly writes:
BTW anyone seriously suggesting the US 'peg' to the EU needs to consider what pegging means... (1) we first have to run surpluses and then (2) we would need to save to be able to buy EU assets to maintain the peg. Anyone besides me see a problem with that?

dryfly | 01.29.09 - 4:01 pm | #

The way I see it, it's just which-comes-first problem.

If we devalue (possibly by issuing too much Treasuries) first, we'll gain a slight increase in EU trade, maybe a minuscule trade surplus with EU.

Use that extra surplus money, recycle back into EUR bonds to maintain peg. This is like prying a door open -- the next cycle around, our surplus will be even more (as USD drop even more compared to EUR) and we up the ante on our peg again. Rinse and repeat.

Remember, China didn't START with a massive surplus back in the 1970s. They barely had international trade.

Like I said, this is very vampiric and I would only suggest to use it as a thought process; but it has the power to completely cripple the "pegged" economy.

Let's see what tale AMZN has to tell this afternoon...
citizen energyecon
.
Kindel up, library use up, Book purchases drop, paper mills go down. We lost several hundred paper mill jobs in my county this year, complete shutdown imminent. In a county of about 55,000 souls, it's going to be a big hit.

What - betting on inflation and hedging deflation or the reverse?
dryfly | 01.29.09 - 4:04 pm | #

The reverse. Unless inflation goes hyper, deflation plays won't lose too badly (long CDs, bonds). If it does go hyper, physical precious metals will be good. In high-but-not-hyper inflation, the deflation plays lose but not too badly. I think the best strategy is to hedge against hyper inflation and invest the bulk of the assets for deflation. At least in the intermediate, five year term, and pay attention to what's happening.

The reverse. Unless inflation goes hyper, deflation plays won't lose too badly (long CDs, bonds). If it does go hyper, physical precious metals will be good. In high-but-not-hyper inflation, the deflation plays lose but not too badly. I think the best strategy is to hedge against hyper inflation and invest the bulk of the assets for deflation. At least in the intermediate, five year term, and pay attention to what's happening.
ille_vir | 01.29.09 - 4:12 pm | #

I wish you luck.

The bonuses are out the door, people. There are no clawbacks without clawback provisions in the employment contracts. Obama can jaw all he wants- he is impotent beyond that.

Shareholders are being fleeced, but this will continue until they put a stop to it.

I'm out.  Off to a job walk.  Lets see if 10+ general contractor show up to bid on something they wouldnt have looked at 9 months ago.... This is getting fugly.....

Senorito On-Topico writes:
"Here is the question of the day:

When hungry and you have a gun, do you sell the gun for food money, or do you use the gun to "acquire" money AND food??"

S-O-T:

Ans: Neither.

No need to go hungry--most people could live for a year on the change under their seat cusions. Beans, tortillas, pasta & rice--keeps 80% of the world's population satisfied.

I hold on to mine (many guns, that is) to protect my family and myself against anti-social cretins who might use theirs to "acquire" my stuff....

So if it comes to a Dollar crash, how do you position yourself financially? (other than bend over after a quick trip to Lefties)

Americans will resist carb and calorie consumption.
scone

(Dammit, I meant consumption decreases.) I don't think we'll get healthier as long as food inputs are cheap. Down at the food bank, cheap carbs are the biggest donation, mostly packaged food. People with 2 part-time jobs, trying to make ends meet, don't have time to cook from scratch. Once they lose their jobs, however, it's white rice and beans, I suspect. Until they get kicked out of the rental, then it's canned goods.

I completely agree dryfly. This isn't an environment where anyone should be trying to "make" money. They should be doing their best not to lose it.

I would disagree somewhat and revise the statement as I view the situation:

This isn't an environment where anyone should be trying to get wealthier. They should be doing their best not to lose their existing wealth.

Keeping your money may or may not be the best way to keep your wealth.

Any thoughts on what I should do with the money.
Pissed Off In California | 01.29.09 - 3:50 pm | #

If you're worried about the dollar, then some small amounts of FXE, FXY, and GLD should also help hedge.  These are mid-term set and forget kinds of assets (but obviously not risk free), when compared to ultrashorts, options, etc.

Keeping your money may or may not be the best way to keep your wealth.
ac | 01.29.09 - 4:17 pm | #

You said it better.

dryfly,
you have it in one.

We will ultimately face serious ripping inflation, which will really suck, as I have pointed out it will be in stuff you need- like food and gas, and not in stuff you don't, like McMansions.

So, what folks have to consider is that it is really just 1974- is anybody ready for 1976 when we get to see the fall of Bagdad?

Consider how nuts folks are getting just at the very beginning of a big long mess.

Go long anybody who makes stuff the rest of the world values- namely our exporters, after you figure out which ones will be tarped enough or have enough capital to survive.

As for us, well, we shall continue muddling through, but as dryfly points out- there are no easy solutions. JJ thinks he has one, but the endgame is beyond his belief.

The funny thing is I used to be the lunatic fringe on this board, now thanks to events, my reality is yours.

Someday this war's gonna end...

Blackhalo- what do you call straight monetization by the Fed?

I had to do something...can someone summarize the last 5,280 comments?

What is happening around the world is a tsunami. It isn't a traditional recession cycle, and it certainly isn't a V.

The disaster that was the fourth quarter has powerful momentum that will roll on for several more quarters, although maybe not as strong. But more numbers will turn red all through 2009 and into 2010.

All the bottom-callers and second-half rebounders are starting to sound clueless, even to themselves.

The world has never seen anything like this before. Obama's stimulus plan is a like a match stick in a storm. He will need to figure out several more stimulus plans, and the dollar will go completely to hell by this time next year.

Corporate earnings are still heading into the deepest trough anybody can remember. At its bottom there will be only a handful of companies in the world capable of making profit for a few quarters, at least. When the stock market starts to tune into this reality, like today, investors start to panic and sell. But the market will stay volatile for months as reality finally slowly sinks in.

Stocks are toast, except for some precious metals miners and maybe (later) some quality energy companies.

Can CRBot tell us where there's new posts on Mish, Karl's, and Barry's site?

Mr. Beach writes:
There is no way out.

Think of the worst deadbeat you know. Do you really think they'll be able to payback debts even after you've reduced them by 30%?
Mr. Beach | 01.29.09 - 4:14 pm | #

Good analogy, except change the story a bit.

Pretend the deadbeat didn't borrow traditionally, instead:
1. He manufactures something called "Treasuries", which he sells.
2. The money he gets from selling it, he (through a process) makes it into his own "dollar".
3. The treasury promises to return to the buyer, X amount (interest included) of "dollar" at the end of the loan.

He can never go bankrupt! If push comes to shove, he'll manufacture as many "dollar" as necessary, to buy back the "Treasuries" that was sold to the lender.

It'll kill his future reputation for selling Treasuries, but he'll be debt free. The lender will be screwed with a bunch of worthless "dollar".

I don't know what else to do with it.
D Westly | \t \t \t \t01.29.09 - 4:12 pm | #

I was in that same place last year. My thinking was that corporate bonds were yielding high rates because of liquidity issues, and were a decent place to put money. I think you have to be very careful when buying individual issues though. Vet your investments, and buy into companies you are confident in. Yields will be higher than CDs, but you have to do your research.

Default on some bonds.
\t Blackhalo | \t \t \t \t01.29.09 - 4:20 pm | #
Do you think that's politically feasible?

AMZN...

thus the theory of saying "whatever the hell we want" and not providing any breakdown for it's rev. streams just keeps the party going on.

"unusually strong demand for kindle in the 4th Q"

They've never released any #'s on it.
Has anyone actually seen one in use??

I saw a Sony book reader once.

Ciao
MS

Do you think that's politically feasible?
ille_vir | 01.29.09 - 4:27 pm | #

Not yet...  But the question was how to devalute currency vs. other fiat currencies, and if paying back only 70 cents on the dollar for bonds, or going negative, I think would do that.

MS writes:
"AMZN...[Kindle]...They've never released any #'s on it.
Has anyone actually seen one in use??"

I have read one testimonial from someone who travels a lot and thinks it is the cat's meow.

I have never seen one. No one I know has one. Not all ubiquitous.

I would like someone to explain precisely what causes a collapse in global air trade to depression levels in the space of a month.

No generalities. I know the big picture. The question is, exactly what was the proximate cause of this? A collapse in trade financing? Demand collapse?

I have yet to see any economist but one try to disaggregate what's going on. In other words, to specify that x% resulted from a falloff in consumer demand while y% came from good borrowers not being able to get normal credit arrangements.

Bruce writes:
I loved his plan, but Asia will probably collapse (because they do not have a balanced economy -- it's too export based) so it'll probably never get implemented.

My fear is protectionisn will lead to nationalism and the US is already front and center in the blame game. This will lead to war. Chinese have too much at stake to let their masses take out their frustration on the CP rulers. They (and Russians) will re-direct the anger toward the US and unleash hell......
Bruce | 01.29.09 - 4:10 pm | #

What makes you think the current economic crisis won't lead to that same ending (via a different road)?

I say screw it; everyone for themselves.

The decision to peg is theirs. Have them eat their own fruit.

I think the unrest will hit their govt more directly than trying to blame it on USA.

Try to explain why USD dropped because USA is in GD 2, and linking it to an "Evil plot by the USA" to common chinese doesn't sound too convincing.

Hugely higher food costs: Could take a while, if oil stays low. Of course, all the ag subsidies could come off, and ag financing could tank. And the water won't get any cheaper. Beans, but no rice. People will start to skip processed stuff only if it is enormously expensive. Skip the boxed cereal, go for oatmeal. No cookies. Nabisco, General Foods goes under... just thinking out loud.

Interesting. Does anyone know what this super-valuable cargo is? Microchips and pharmaceuticals?

Ponies?

It'd be easy to get at least a billion dollars of biological pharmaceuticals on a single cargo 737 (spoken with some authority), but there just can't be that much in transit.

I wonder if they include financial certificates in that number? Then it would certainly make sense.

Deflation as far as the eye can see

Like dryfly mentioned - the pressures against it, when it gives, will be fast and dramatic - like holding a door closed until you can't anymore.

Yup. Only claw back would be for fraud & misrepresentation.
dryfly | 01.29.09 - 4:34 pm | #

How about the 2008 Bonus tax?  100% for any bonus over, say 10K?

"Are there any companies that inspire confidence in this environment?"

419ers are a getting better at inspiring confidence. Get rich cons do best in down economies.

Nostrovia,

Interesting:

Why the latest round of corporate layoffs isn't unlike the financial crisis the Roman Empire suffered in 33 A.D. - By Tom Ricks | The Best Defense 

Tarpeian, eh? We could rename it the TARPian Rock and juice the air freight numbers by flying over our hedgies and i-bankers as freight for one last cliff dive.

Are there any companies that inspire confidence in this environment?

Seems like all corporations are hurting now (or soon will be).
\t D Westly | \t \t \t \t01.29.09 - 4:35 pm | #

Yes, but at least some of them will make it through. Their stock prices may go down, but a majority will not go broke (this is the only thing you care about when buying debt). I researched which sectors did okay in past downturns, did my amateurish analysis (i am not an accountant or in any sort of financial course of work) of balance sheets in those sectors, and looked at the yields. Good luck to me, and I hope you will have better help than I did.

You better be a nimble trader
dryfly | 01.29.09 - 4:04 pm | #

I have been accumulating UDN and PCRDX.  UDN in case the Fed figures out how to monetize, and PCRDX in case everyone else does too.