Debt Markets remain the key

The debt market remains the key to the markets. The spreads between mortgages, corps, junk and municipals to Treasuries are at extreme wides. RISK is a four letter word. With hedge funds seeing massive redemption requests and mutual funds seeing sales requests, selling pressure remains intense. What do hedge funds own-spread product. The carry trade overheated and is still unwinding. This is the Tech Wreck 2000 Redux. No traditional asset manager wants this rocket science product. They are protecting their job, their assets, and their scarce capital. The unwind will take months if not years.
Banks are not lending as their balance sheets are a disaster. Who knows what they own off balance sheet. There will be short covering rallies as the calendar moves through year end, but the business model for the financials needs to be revised. Gone are the days of the wealthy and not so wealthy paying up for a piece of the action. Slow growth is the norm.