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Saturday Morning

I escaped the big snow and am comfortably ensconced in the country on this beautiful winter morning( -20 here and sunny.

 I just updated all the charts in The Learning Center and the story has not changed much: Government bond yields are plunging. meanwhile, there has been some improvement in credit spreads and the TED spread has also continued to fall.
I will see what I can do about graphing the government/corporate spreads as there will be and are, excellent opportunities to reap incremental yield rewards in 2009.
 The other key will be the US dollar.It may have peaked and, if so, you can look forward to a rebound in lots of things, including some commodities and the Canadian dollar.
Governments everywhere are throwing so much money at their economies and increasing money supply that the inevitable will be a recovery of some kind accompanied by massive government deficits and a concomitant increase in bond issuance. The exodus from government bonds to corporates, when it occurs, will be tsunami-like so it might behoove you to begin nibbling at some investment grade corporate bonds. The ishares ETF is a good way to do this because of the diversified portfolio.
 Bond markets will not be overly active form now to year end. I will update the site as needed and, of course, the bond prices will update every trading day.
I notice that there may be a settlement in the ABCP fiasco and that has to be good news for our markets overall.
 In the meantime, my best wishes to one and all.
Hank Cunningham

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