Let's jump in our time machines and take a trip all the way back to last August when the world was reeling from the combined effects of a dysfunctional US political process a downgrade of US Treasuries a credit crunch in the eurozone and for all I know the hopeless position of the St. Louis Cardinals in the National League. The option-adjusted spreads (or OAS) on both US investment-grade and high-yield corporate bonds were expanding leading the sky-is-falling crowd to proclaim gloom and doom. However as I noted in Dissecting Credit Spreads those spreads were widening not as a function