As of today, credit spreads on High Yield bonds have attained new heights, those not seen since October 2002, when they reached 1120 basis points. The spread between corporate high yield debt versus their comparable treasury yields reached 1124 bps as of yesterday, and is likely to go higher as a result of today's market activity. This signals an enormous amount of worry in the market caused by the "Bailout Election Race" that has sidelined the Presidential race.
Credit is getting very tight, and far more expensive.
Chart: Bespoke
Data: Merrill Lynch
