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The Last Time This Happened In Credit, Bernanke Unleashed QE3
While Carl Icahn's latest ramblings have brought attention to the 'bubble' in high-yield debt, we would note that the HY market has already dramatically diverged from the ongoing bubble in US equities and as we have been discussing for the past year, this is exactly the pattern we saw in 2008. However there is another aspect of the HY market that is flashing red, High yield debt downgrades are the highest since Lehman and the upgrade/downgrade ratio has tumbled to its lowest since the crisis...
"Price" has broken...
High yield debt downgrades are the highest since Lehman and the upgrade/downgrade ratio has tumbled to its lowest since the crisis...
The last time this happened, Bernanke unleashed QE3 - are we about to see the same in a massive surprise to markets?
There has not been this many downgrades since the crisis....
If indeed HY is a super bubble, then stocks have a major problem: the credit cycle has turned and a dismal dose of reality is about to come upon US equity markets as the rise in the cost of capital blows up the debt-fueled boom in buybacks... no matter how hard CEOs try to justify their compensation.
Charts: Bloomberg
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QEn, it is better to come clean and admit it
They will/can never stop till delivery of everything is forbid, leaving the people to eat hope....then they will print again.
Till the people choose another medium of exchange the mainstreet rape merry go round continues...good thing exchanging in a currency of the peoples choice isnt illegal or anything.
RIPS
Janet, have you seen my monkeyhammer?
Someone say criminal conspiracy?
Qinfinity. There is no other way.
You left it behind the Crimex.
SINCE LEHMAN !!!
Dammit! You beat me to it!
Ok, ok.. I'll drink.
Too much liquidity sloshing around.
Analysis here is spot on...but it takes only one point of view and is not concerned with facts. Never a good combo.
With so few dollars sloshing around outside the USA due to the energy boom etc "everyone is buying dollar based financial assets."
Yes that is mostly high yield bought by folks OUTSIDE the USA "just to gain access to actual dollars."
But those aren't the companies making all the money...most of them have almost ZERO yield...some being private of course.
And yes...there is no problem doing an LBO right now either...and simply ridiculously low interest rates.
Wanna take Coke private?
No problem from what I've read...
Not without me you won't, yrad. I need a drink too ! LOL !
QE4 is a good thing, we need to devalue the dollar, immediately.
/sarc
Fed will do it until dollar 0. It will get real dicy before then.
Not sure even if the Fed wanted to it could devalue right now.
Deficit is only 400 billion...mostly interest on the debt on imagine...and revenues keep flooding in (100 billion below CBO estimates from just one month ago.)
With no dollars to buy folks are running out of treasuries to buy too.
This has led to a.FLOOD of direct foreign investment into the USA in order to tap "internal demand" I order to...you guessed it...get more dollars.
Talk about the hard way!
Not sure how long this can be sustained but certainly no problem buying gold or silver coins...even bars...in dollars.
Bring it on. Fuck these clowns. Let it all burn so we can start over.
What if they threw a QE, but nobody came. So far with each round of QE less and less of the intended effect has been produced. The next round could very likely have the opposite of what was intended, but the game must be played and the music is already written....
The question is:
What does Mr. Yellen believe in (if anything)?
Yellen believes whatever Dear Leader tells him to believe.
It's why Peter Schiff was saying QE4 is inevitable.
QE to infinity until there's a currency crisis.
When the Federal Reserve loses control rates shoot up and the Fed stops bank withdrawals.
Bank holidays.
no way - you all got it wrong! the tee-vee says a rate hike is coming soon!
Nothing to see here, move along you dumb ass rubberneckers.
Their next move, raise federal rate, QEInfinite on socialist based muni's.
I want to see 666 again...
What's Mr. Yellen going to buy? The deficit is too small for any massive QE program, which means new debt would have to be created and monetized.
The Fed. already owns the bond market, so what will they buy? 3x levered most shorted biotech ETF's... haha
someone needs to check with Steve LIESman....
Price Discovery has been broken since at least 2011. All we have now is Central Planning Economics and the Deep State.
The USA is no more. :-(
All hail and pledge allegiance to USSA. Else... bring out the bulldozers and wrecking balls.
The US economy, like most Western economies, is addicted to the crack of virtually free money. And US debt and unfunded liabilities are so high that any rate increase will be a major burden on the economy.
The easiest temporary solution is more QE. The Fed cannot afford a bear market in bonds or stocks or real estate. And anyway, the Fed always takes the route most likely to please Wall Street.
So look for more QE.
Wall Street and the FED are one in the same, institutions run by crooks beholden to one another.
Yes, but they need an airtight excuse. What's brewing right now might just hand it to them before September.
For the thousanths time BTFD!
What will the narrative be surrounding QE4? Was listening to NPR an hour ago as they chirped brightly about the >200k job creation and the lower unemployment (5.3%). I guess they'll float the 'Cuz Greece' excuse, hoping the gimmiedats are more focused on Caitlyn's fashion taste. . .
I like the way the high yield credit chart inverse correlates with the dollar index.
Where is that FED put. Markets can't go down. Ohhh noooos maybe they finally given up the ghost. They must realize you can only pole bull shit so high.
Unleash the Krakin and sink this ship already!
https://www.youtube.com/watch?v=9HGMxZEl60k
Different this time maybe?
http://www.zerohedge.com/news/2015-06-29/jpm-just-cornered-commodity-der...
"At my signal, unleash Hell"
https://www.youtube.com/watch?v=8IPzpaD4UOE
Fortunately Smellin' Janet Yellen has a sociopath in Obama crying racism and white privelege, whilst opening the sluice gates on the Mexican border, to create a distraction.
Gotta love the Human Hairpiece Trump calling real balls and strikes and not the psuedo strike zone called by the short fingered and light loafered Media. Y'know if'n you want to call them "Media".
Erstwhile who the fukc in the USA would not see / recognize the crimes being committed by The Fed on behalf of the top management at US banks ?