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September 23, 2007
Eye-Opening Stat on the Credit Crunch
There is an eye-opening statistic on the credit crunch in a report last week from Greenwich Associates:"In perhaps the clearest indication of the severity and extent of the liquidity disruption, more than 60% of participants active in corporate bonds say they have experienced trouble getting a simple price quote from dealers on these usually liquid products,” says Greenwich Associates consultant Tim Sangston.Sixty percent of corporate bond investors have had trouble recently getting a bond quote? That is remarkable.
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It was remarkable to me, until I found out that most corporate bonds don't trade regularly:
"According to TRACE, which is a system for tracking corporate bond trading, about 4,300 TRACE eligible corporate issues trade each day. That's less than 3% of the total corporate universe."
http://accruedint.blogspot.com/2007/08/thats-impossible-even-for-computer.html