Be Thankful: At Least You're Not A Turkey

November 19, 2007

Remember the good old days, back in October? Yeah, the sweet times. Now, heading into the holidays, there seems little for the high yield bond market to be thankful for, not to mention the leveraged loan secondary.

Consumer confidence is waning, what with the mortgage crisis and gas prices. And if consumers can't work up confidence then neither can the investors who invest in the unsecured debt of companies supported by the American economy.

Economists expect the overall economy to slow dramatically in the current quarter and the first quarter next year, a period which many of them see as the maximum danger zone for a possible recession.

Core retail sales have climbed over the past three months at the slowest annualized rate since five years ago, when the country was struggling to emerge from its last recession, Ian Shepherdson, chief U.S. analyst at High Frequency Economics, told the Associated Press. And he predicted this weakness would intensify.

"We expect a further deterioration as consumers cut back in the face of soaring gas prices, falling stock prices and the continued disaster in housing," Shepherdson said. "The holiday season will be terrible."

And you thought the Grinch only stole Christmas from Whoville.

Of course, we can't forget the bank write-downs, each one following the next in a sad march that has cost hundreds of jobs, and, as Mr. Shepherdson mentioned, the volatility on the stock market.

All of this doom and gloom wrapped up with a sleek, black ribbon has stalled issuance on the high yield bond primary, which has seen the return of the pulled deal, and sent secondary loan prices back to the 95 area.

But wait, didn't I mean to give you something to be thankful for? Well, I could point to deals getting done on the primary loan market. Investors there seem willing to buy at least the midmarket deals and parts of larger deals like Alltel.

But what always fills me with joy (and you too, admit it) is a good look around at others who have it worse than I do. So here you go; some reasons to be thankful that hopefully apply to you: 1) You are not Chuck Prince (I know, but in the spirit of the holidays, try to scrape up a little sympathy). 2) You are not Britney Spears (I am not kidding, I feel sorry for the kid). 3) You are not a turkey. Happy Thanksgiving.

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