The stock market had a strong rally yesterday, but the credit markets weren’t so ebullient. Many of the ABX indices pushed to new lows, interesting that even (especially) the A tranches are now being taken out and shot. Only the AA and AAA are still holding their ground. Numerous LBO credits are being postponed, revised or withdrawn, and another, smaller, hedge fund invested in subprime mortgages bit the dust. Carlyle Group, the buyout firm run by David Rubenstein, postponed a planned $415 million initial public offering of a fund that invests in bonds backed by mortgages. Sounds like Everquest. The Mortgage Lender Implode-O-Meter is now reading 91. Yet I still read people calling the bottom in residential real estate.

Fed day today. Boring markets expected until the announcement, then wild swings.