LCDX

Credit spreads have widened by 45 basis points since the beginning of this month on this index that tracks credit protection prices on 100 names.

The REcapitulator knows very little about the Byzantine and wild-west frontier of the credit markets (and he suspects that it is very much a rigged game), but what he does know is that when a movement like this occurs, re-hedging and re-collateralization is a very painful experience for weak hands.

Could it be possible that people actually are starting to think there may be some RISK in levering up low-yielding assets, buying higher yielding ones, and pocketing the spread?