It looks like todays stock selloff is not going to have the type of bounce back we have come to expect–it “feels” (a scientific term no doubt) a bit more serious.
With common stocks falling the 10 year treasury is down in the 2.41% area–in sympathy with stocks.
The spectre of the Chinese dumping treasuries is being raised by some–of course no one really knows whether there is any possibility of this happening. On one hand I think it could happen–but on the other hand if the Chinese started to sell treasuries yields would move higher–thus prices lower–it seems it would be shooting themselves in the foot if they drove prices lower. Additionally it is likely that the FED would step in at some point and buy. Who really knows what will happen?
Surveying our holdings today we are off 1/10th of 1% overall. The average price of a preferred today is off 5 cents–no panic, but there are plenty of issues off 1%–not many that are much lower (except some of the usual suspects such as the CBL issues).
It is our intention to simply wait and watch. I probably wouldn’t even buy “bargains” today – simply better to watch and see how things play out for a day or two.