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Hi Charlie,

You wrote
But I've never seen a 10+ point spread until this morning when I bought some Marconi 7.75's of '10 at 80.903 at Schwab yesterday and see they are marked to market at 70 something today. This was the first time I've used Schwab, so I don't know whether they are merely very conservative about how they value a customer's bonds, or whether the the valuation spread is really that wide

I have had similar things happen with both Schwab and Merrill Lynch. I called both firms and was given essentially the same story from both. They stated that on bonds that they do not have in their inventory, and that are not traded on an exchange, they use a bond pricing service to price the bonds.

These prices, they said, were to be used as a guide.

When I am interested in purchasing this type of bond, I go to Bonds on Line or Yahoo to check prices. I usually go to three dealers for quotes. I use Brown, Merrill and Schwab. When the quotes come in, I order the lowest priced bonds. Normally the price I pay is less than shown on either of the web sites. If There are a number of different offerings of the same bond shown on the web site, I may make a counter offer lower than the price I was quoted.

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