By Peter Tchir:Ask almost any credit trader how the market is trading, and the most common answer is broken. Yesterday, a few people would have said bidless, or ugly, but today, it's just broken. Liquidity is extremely low. Every trade resets the market. Trades are being driven by fear and fear alone. Fear of a further sell-off. Fear of whipsaw. Sovereign debt trading was the first to be hit, and it has now hit all the credit markets. Even equities seem to have witnessed a complete breakdown, with big air pockets. For the S&P, five points seems to be just a little noise every few minutes waiting for the next big move. S&P futures have already traded in a 70 point range, not too big for a month, but a lot for 12 hours.
Yesterday's winners still seem to be doing well. Gold, up big, again. Even more interesting, is that Spanish
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