RealMoney's Best of Blogs

This week's highlights from our bloggers: Rev Shark, Steve Smith and Tony Crescenzi.
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As always, RealMoney's bloggers were all over the market action this week, and we'd like to share the best of their recent commentary with readers of TheStreet.com. These posts best capture the intent of these blogs, which is to provide intelligent discussion on the issues each writer sees as most pressing that day.

Let's take a look at

Rev Shark

on the reality of this market,

Steve Smith

on what

Blackstone

(BX) - Get Report

really is as an investment and

Tony Crescenzi

on tracking credit spreads.

Click here for information on

RealMoney.com

, where you can see all the blogs -- and readers' comments -- in real time.

Rev Shark's Blog: Which Reality Should We Believe?

Originally published on 6/19/2007 at 8:19 a.m. EDT

Reality is that which, when you stop believing in it, doesn't go away.
-- Philip K. Dick

The market has been quite frustrating for many market participants who have been standing aside waiting for the correction that they feel is inevitable. For some time now, this has been one of the most unloved rallies we have ever experienced. Market players just can't seem to really embrace the bullish case so they stay cautious and are reluctantly dragged along as the market just keeps on going.

The problem seems to be that the typical individual investor simply can't reconcile what he sees around him in the form of weak housing, high energy prices, inflationary pressures and economic issues with a tremendously strong stock market. The average American investor just isn't experiencing the same sort of positive economic factors that are apparently driving the stock market.

Unlike most of our big rallies in the past, this one is being driven more by international growth and liquidity than it is by domestic factors. The average U.S. investor isn't seeing that around him as he goes about his daily business. There are still an unusually high number of homes for sale down the street, his monthly tabs for gasoline are consistently higher and the price of food is going up even though the media keeps saying there is no inflation. No wonder he is reluctant to trust a market that is acting like we are in the midst of a great economic boom.

So do we believe what we see around us as the true reality and continue to doubt this market, or do we ignore those things and give into the reality of a tremendously strong market?

As small individual investors, we have great flexibility and can move quickly, so we shouldn't get too hung up on trying to figure out what the real driving forces are in this market. It is going up, and there are good opportunities to be found. We might as well avail ourselves of them rather than moan and complain about how unrealistic this market is.

That approach requires a fair amount of vigilance, but it is the best way to deal with a market that you distrust but that continues to act well. A short-term time frame will allow you to profit but will also protect you if the market finally begins to falter like so many think it will.

We have a slightly soft open to start the day. There isn't much news on the wires other than the change in management at

Yahoo!

(YHOO)

. Overseas markets are mixed, with some continued strength in Asia and some profit-taking in Europe. Oil and gold are trading flat.

No positions.

Steven Smith's Blog: Interesting Angles on Blackstone

Originally published on 6/21/2007 at 3:23 p.m. EDT

Coverage of

Blackstone's

impending IPO is becoming all-encompassing and bordering on smothering. But some of it is warranted, as it does have some interesting angles and could possibly become an important benchmark and tell for future market activity, in terms of both structure for participation and direction of the stock market.

In terms of structure, there is the irony that investors are basically ceding all control to management and hoping to profit from a business that is highly dependent on taking and operating companies as private entities. As one commentator described it, the stock then becomes a "call option" on the private-equity and buyout business, in that the profits that do not drop directly to the shareholders as "premium" will be extracted by the upper layers that are selling the shares, but still control the company.

On

his blog

, Adam Warner points out once options are listed on Blackstone, it could make for some interesting trading, as the stock will be vulnerable to gap moves on news relating to news on taxation issues, jawboning by politicians, interest rates and, of course, specific deals it pursues. Adam compares this to drug stocks, in which the implied volatility will generally run much higher than what will become the historical volatility of the underlying shares, on the notion that a big event could occur at any moment.

Like many high-profile IPOs, the options usually start with very rich premiums as market makers get a handle on the true volatility. If this stock has a big spike in the first few days and options get listed shortly thereafter, I expect IV to be in the 80% level while the stock will probably settle into a real range on the order of 40% within the first 30 days.

Tony Crescenzi's Blog: Mortgage Lateness Not Terrible

Originally published on 6/22/2007 at 11:24 a.m. EDT

I received a number of queries Thursday about how to track credit spreads. They've signaled worry about the subprime market, which has been a key feature of the markets this week.

I've written about how swap rates have simmered down, signaling a calming of fears about credit issues -- something readily apparent in the rebound that occurred in stocks Thursday.

If you are interested in tracking credit spreads during the day, track swap spreads. They capture a wide variety of credit fears.

There are other areas to look at as gauges of credit fears:

The yield curve will steepen when credit fears grow on the notion that the

Fed

might have to cut interest rates. For example, Thursday morning the yield curve steepened sharply before stabilizing later in the session.

The performance of T-bills compared to eurodollars, the so-called TED spread, also reacts to growing credit fears. As anxiety about credit increases, T-bills outperform eurodollars, which are considered riskier because eurodollars represent dollars deposited abroad.

The S&P speculative-grade credit index works on a delayed basis. This indicator measures the yield difference between junk bonds and Treasuries.

Other gauges include corporate securities themselves, if you can get a quote on a liquid issue. Compare any quote to Treasuries and look at how the yield spread has performed vs. other days.