Corporate Paper Rally

Across the curve:

Corporate bonds are on fire today. Spreads are ratcheting in as buyers emerge after a long period of hiatus. One salesman noted that 10 year and 30 year industrial paper has tightened 25 basis points to 50 basis points to benchmark Treasury debt in the last two weeks.Caterpillar Tractor 10 year paper traded T + 400 less than two weeks ago and is 360 bid today.

GE 10 year sector paper was in the 360 zone recently and is 325 bid today.

IBM 10 year paper has rallied from about 350 to 260 bid.

I'll go on the record and predict another round of declines. The worst, I think, is yet to come.