The news:
Companies sold the least amount of bonds in a decade this month as concern Europe’s sovereign debt crisis will slow the global economy drove up relative borrowing costs by the most since the aftermath of Lehman Brothers Holdings Inc.’s collapse.
Borrowers issued $66.1 billion of debt in currencies from dollars to yen, a third of April’s tally and the least since December 2000, according to data compiled by Bloomberg. At least 14 companies withdrew offerings, including New York-based retailer Jones Apparel Group Inc. and theater chain operator Regal Entertainment Group.
“There’s still a lack of risk appetite for company debt,” said Ben Bennett, who helps manage the equivalent of $125 billion of corporate bonds as credit strategist at Legal & General Investment Management in London.
It would be the smart investors who are either getting out or staying out – dumb investors are the sort who drove up the DOW by 2% on Thursday…only to see it sink about 1% today; there are morons out there who bought just before the close on Thursday and didn’t sell until ditto on Friday. Smart rich people will remain rich, dumb rich people will get no end of a lesson. The crash is coming, people: get ready for it.
Spain lost its AAA rating today – step two in Europe’s collective default. They managed to delay things by playing make-believe with Greece’s bond debt, but all they did was delay the inevitable. There isn’t enough money in the world to cover all the debt outstanding – someone is going to have to lose.
The banksters and bureaucrats hope the biggest loser is the guy you see in the mirror each morning – and that in such loss you still won’t blame them but will turn for a few welfare crumbs. In service of this goal, they will keep trying to fudge the numbers in a game of fiscal roulette and hope against hope that it all comes out ok, for them. Our job, as informed and rather angry citizens, is to prevent this – and our best means of putting a spoke in the wheels is to vote Republican in November.
But regardless of what happens or what we do, we’re going to head in to much worse economic times than we have so far. Wise policy can no longer prevent this – it can only lessen the effects and speed the path out of it. Of course, for there to be wise policy, we will need at least a few people in government with wisdom.
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