Stocks rose today on news that Warren Buffett's company, Berkshire Hathaway (BRK-A), will offer secondary insurance on municipal bonds. It should be remembered that he is talking about "good" paper, not risky sub-prime loans. PIMCO, the largest holder of bonds, said they are buying bank debt of Citigroup (C), Bank of America (BAC), etc. because their yield premium of 265 basis points is just too attractive. I think this type of reasoning can be applied to junk bonds with yields of over 700 basis points over the Treasury rate at 3.68%.
Dow was up 133, banks & REITs among others did well. Advancers were over decliners about 3-2 but NAZ was flat, maybe a signal for tomorrow. Masco (MAS) reported disappointing earnings & a gloomy forecast for 2008, down 2.39 (11%). That is a "big picture" story since they sell home builders & people remodeling homes.
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