Darda says it’s entirely possible that companies who need credit the most might not be able to get it.
That's because corporate bonds are being issued at the weakest pace in a decade and it's been three weeks since a high-yield corporate bond, or junk bond, has been issued. The drought is partially due to companies sitting on the sidelines waiting for conditions to improve however, it's also because there are not enough buyers.
Why is that a problem? When companies can't get funding from the markets, they have to draw down their credit facilities with their banks — which often forces the banks to hike their borrowing rates.
As the economy weakens, the companies that are going to need funding the most desperately are the ones further down the credit quality ladder.
So what’s the bottom line? “There is improvement out there but there’s a long way to go,” Darda says.
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to firstname.lastname@example.org.
Trader disclosure: On Oct. 17, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (AAPL), (CSCO), (GOOG), (JPM), (MS), (SLB); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NOV), (UNH), (DVN), (WLP); Finerman's Firm Owns (DNA_ Call Spreads: Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (USO), (BBT), (COF); Najarian Owns (AAPL) And (AAPL) Call Spread; Najarian Owns (AMD) Puts; Najarian Owns (CHK) And Is Short (CHK) Calls; Najarian Owns (HAL) And Is Short (HAL) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (YHOO) Calls; Najarian Owns (MGM) And Is Short (MGM) Calls ; Najarian Owns (UNG); Terranova Owns (AAPL), (EXM), (FCX), (FTO), (MA), (NOV), (POT), (X), (VLO)
GE Is The Parent Company Of CNBC
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CNW), (OFC), (DLM), (DRH), (DLR), (EPR), (EXR), (FL), (SLB), (LNET), (MAC), (DBC), (DBV), (SKT), (UA), (BLV), (VV), (CLB), (GWX), (IGE), (FSMXX); Virtus Investment Partners Owns Seagate Tax Refund Rights; Virtus Investment Partners Owns Seagate Technology Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of Shares Of Incitec Pivot Ltd.; Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc.
CNBC.com with wires