S&P says up to 75 Western European companies could default on debt in 2010 – … representing a default rate of between 8.7% and 11.1%, according to Standard & Poor’s Ratings Services. “While the annual default rate is likely to have peaked at 13.1% in the third quarter of 2009, we expect it to continue to run at more than double its historic average throughout 2010, as the slow pace of economic recovery is likely to be insufficient to save many highly leveraged and poorly performing companies.” … – Research Recap
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And Fed Fund Futures Awake – Submitted by Tyler Durden – Major move in Fed Fund futures today, with the implied probability of a rate hike to 1.25% by November 2010 nearly doubling to 14% from 8.1% – Zero Hedge
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Dollar Carry Trade Remains in Vogue – Posted by Larry Doyle – … What does all this mean? Lots of questions remain, including:
1. Will the cheap source of funding from a 0% Fed Funds rate continue? How long?
2. Will the Fed extend its quantitative easing program via its purchases of mortgage-backed securities beyond Q1 2010? How would the market react if it does not?
3. What happens to the train wreck that still encompasses our commercial real estate markets?
4. Will retail sales confirm the labor statistics reported today?
5. Will the markets begin to trade based on fundamentals instead of the technical support provided by the Fed and Treasury? Can Ben and Tim carefully let the air out of the bubble created over the last 8 months? – Sense on Cents Blog
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counterpoint to peak oil – Cheap Oil is Here to Stay; Forget “Peak Oil,” We Now Have “Peak Demand,” We’ll Never Run Out – Mark Perry Carpe Diem Blog
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Asset-Backed Bond Market Must Embrace Stricter Rules, Bair Says – By Dawn Kopecki – Federal Deposit Insurance Corp. Chairman Sheila Bair said the market for bonds backed by consumer debt won’t be weaned from government assistance until banks embrace stiffer guidelines for issuing the securities. “Nobody has any confidence in the securities,” Bair said – Bloomberg
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READ THIS: America Without a Middle Class – Elizabeth Warren – Huffington Post