All You Need To Know About The Market
The following excerpt from a commentary from Reuters/LoanConnector discussing the trading in Citadel Broadcasting loans is all you need to know about (i) market dynamics and (ii) why you probably have to be a schizophrenic to be trading in this market. Not much commentary needed, as no commentary is needed to explain the irrational exuberance that is driving the market parabolically higher as such logical dominates.
(NY) Citadel's loan climbs amid missed payment, market demand
September 16, 2009 - Citadel Broadcasting Corp's term loan has moved up approximately seven points on the week, sources said. The loan was quoted today at 65-67, up from 58-60 a week ago. The company missed a convertible bond payment due yesterday.
Citadel is driving higher as a result of credit quality and market dynamics, said a trader. Any credits nearing events that could trigger a restructuring or that are heading into bankruptcy are going up, aided by investors chasing low dollar names, he said.
Summary - bankruptcy is now a positive catalyst. As we have been saying for a long time, with the Federal Reserve now officially having made a mockery out of the investing process, trade at your own peril.