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Junk Bonds "Even More Dangerous" Than Stocks, Icahn Says
Early last month we asked: "Is The Stage Set For A High Yield Meltdown?" As a reminder, here is how we summarized prevailing HY market conditions:
Periods of QE in the US saw US HY supply surge 50% above normal levels as issuers sought to take advantage of lower borrowing costs and investors clamored for the relatively higher yields they could get by taking on more credit risk. More recently, struggling oil producers have tapped the market in an effort to stave off insolvency as crude prices plummet, leading directly to a situation where outstanding HY energy bonds account for a disproportionate share of all outstanding debt in the space. With rates set to rise later this year, with crude prices likely to stay depressed for the foreseeable future, and with suppressed liquidity in the secondary market for corporate credit poised to bring heightened volatility, the stage may be set for a high yield meltdown.
Now, Carl Icahn is out warning that junk bonds are in fact the biggest threat facing investors today.
"What's even more dangerous than the actual stock market is the high yield market."
"It's ridiculous...I think default rates are going to go up in this market... and the people buy it! The public... I'm going to try to put stuff out and let the public know what they should be aware of because I feel bad for them."
"They're buying the yield and they think 'Oh, bonds are going to go up,' but when they start coming down, there's going to be a great run to the exits and at least in 2008 you had a bit of a safety net with the prop desks at banks, but now with the Volcker rule you can't even depend on that."
Here's the full video:
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He looks like the most interesting man in the world.
Does this mean Ackermann will go all in on Junk Bonds now?
He totally does, lol.
"I don't alway short bonds, but when I do, I preferr junk bonds. Stay on the sideline my friends..."
Calling Wiliambanazi! Make this!
he has invested vast holdings in ebay and the pe, at last check, was 1152. He was in talks with alibaba and was assuming it is reported, that ali would BUY ebay, thereby making some money for icahn. A freind asked me if he should buy apple now that icahn said it would go to 250. sheesh. I said I could not listen to advice from icahn with him holding the ebay "investment".
I guess icahn has not made the assumption I have, which, is that pensions and 401k's are being steered into all the bets that will most likely lose them money.
Ho Ho Ho
junk silver beats junk bonds every time.
Forgive me if I happen to doubt your altruistic intent there, Carl.
I'd wager the junk bond market is the one place where Ma and Pa Kettle absolutely will not get burned, but assholes like Icahn can and will.
Carl I-con has the map of Israel squarely on his fucking face.
Every guru worth his salt calls for "end of the world scenario", "this will end badly", "don't invest" on 1 hand and then, with the other, they continue buying up everything they tell you not to buy. Show us your portfolio Uncle Carl! Are you at a ZERO percent allocation on junk?
When the pensions demand 8%, and hedge funds have to show some actual return to justify that 2/20 -- and ZIRP has eviscerated every safe haven -- managers will grab any junk they can get just to keep their jobs for another quarter. It's called 'dumb money' for a reason.
This happens every... single... time. Just like in RE, where the big money has now pulled back just in time for shearing season. Thank God we have Central Banks to keep our markets so damn stable.
Better listen to him.
Is that the Star of Moloch in your avatar or are you just beaming with joy to see fellow tribe member Carl Icahn?
Don't be mad just because we own your butt!
Bow goyim, bow!
(I'm Jewish via maternal genetics - not beliefs/behavior/immorality - only).
We can't help that we're Chosen.
You could have sex with a real man, not some jew shithead, and have a bastard child. You'll finally find out what it is like to have sex with somebody who knows what is what, not some schmuckless schmuck.
Is this some inside joke that I'm not aware of? Are there no standards for conduct in the comments, or do you just think it's ok to verbally attack Jews because they're Jews?
It's called free speech.
Icahn, like Madoff, Corzine, Blankfein, Dimon, Tepper, Hank Greenberg, and 90% of Wall Street self promoters, is Jewish (despite Jews representing a scant 2% of the U.S. population).
Why is that?
I'm not saying that you don't have the right to say it. Like mark Cuban said, I'm all for free speech because I want to know who the idiots are.
But to answer your question, I'm assuming from your apparent worldview that your answer would be "because Hitler was right."
I'm assuming that Jews are over represented because throughout history, people much like yourself did not allow them to hold occupation in a great many fields of service. Banking and Hollywood were two examples of occupation that Jews were allowed to have, and they just so happened to be very profitable.
But I'm sure that you're probably right and that it boils down to the Jewish instinct to manipulate and steal wealth from the much more worthy, like yourself.
is that you, vegasdave?
hasbara's law invoked
I want to know who the idiots are. Good one.
I just wish the idiots could find something else to say every once in a while.
As Winston Churchill (the real one) once said: "A fanatic is someone who can't change his mind and won't change the subject."
And basketball players are predominantly african-american. Is that a conspiracy too? The answer, friendo, is that the Jewish people revere learning, and thus are able to reap rewards in a merit-based society where education is valued. Also, I'll note that your list fails to include a number of other prominent bankers. Where is Vikram Pandit, for example? In other words, the fact that is relevant is that there are a lot of scummy bankers, not their religion.
If you reincarnate as a black man, we know who you will be blaming next.
If you return as a woman, we know which sex you will hold accountable for your troubles.
If you return as an Arab, well, nevermind.
It is always SOME OTHER GROUP than the one of which the complainer is a member that is responsible for the complainer's own miserable station in life.
you just learn who to read.
Its like the anti-dentite jokes the dentist told in Seinfeld. Hence, the dude who is Jewish but hate Jews is ok.
Not to mention but there is, excuse me, was something, called 'free speech' in USA.
Stick and stones will break your bones,
but names will never hurt you.
One feels constrained to point out that hate speech is not a subset of free speech. Got constitution?
The Great Deceiver works his magic on his tools.
What a rude, classless nazi swine.
I fucking hate Carl Icahn.
That said, I completely agree with his assessment. As a convertible bond trader for the past 15 years, I have never seen markets so illiquid.
The swoon in October really showed how thin and fragile the HY market is right now. We saw bonds all over the board gapping down 5 points (5% of par) at a clip. It was fucking scary. And none of the big dealers were doing much to provide any sort of liquidity. If there is a bigger scare the HY market is going to get eviscerated...on very little volume.
I've yet to see one of the scumbags NOT talking their book.
They make these public statements for a reason, after they've set their positions.
P&I mag says you worry too much. HY efts will be our salvation and bond market harmony is found without greedy I-banks getting in the way. Only one way to find out if this is true....
but my financial panther said bonds are safe!
What's a panther know anyway...
my financial cougar wants to fuck me.
but i'm going to charge her.
Ichan looks like he just woke up from under a rock!
Awesome!
:)
To me, he looks like he's saying "Stay thirsty, my friends."
Buy! Buy! Look at the yield man! Buy!
Goodness I can't resist.
But it is on topic, even if it is sort of funny.
It will really take an Ark sized Boat to float all these Covenant-lite Issues (even if they are VERY light - there is a HUGE pile of them) when things get choppy and there is rain on the hi-yield plains.
Doesn't help if all that is circling below aren't nice friendly muppetfishes, but bottom feeding Sharks!!
The time to buy will be when the Red Sea is really Red.
When I was a salesman at Drexel Burnham Lambert about every third deal had ICAHN involved.
Amazing how these billionaires forget.
Forget or care? Are they the ones making money is the point and all they'll remember.
Carl iCUHNT
Is this guy part of the same group that was touting the US$ a couple weeks ago.
Not saying he's wrong, but gee, that last plan worked out well.
I wonder what is next front-running order book looks like.