"This Will End Badly" High Yield Bonds Tumble To Worst Since 2011

Tyler Durden's picture

As far as credit markets are concerned, U.S. stock investors have lost touch with reality. As Bloomberg reports, the collapse in high-yield bonds "is something that sooner or later is going to impact the stock market," according to one major asset manager.


We have, of course, seen this picture before (most egregiously in 2007/8) and as Bloomberg calculates over 70% of the time since 1996, as spreads widened as much as they have since April, the S&P 500 has fallen, with the average decline exceeding 10%.


History may not repeat but it sure does rhyme...


Charts: Bloomberg

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Hitlery_4_Dictator's picture

I didn't know there was any reality left in America. 

Tasty Sandwich's picture

"We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors … and you, all of you, will be left to just study what we do."

- Karl Rove

(JustObserving uses this quote often too)

silverer's picture

Sounds like Zeus and his cohorts.  I guess history does repeat.

Tasty Sandwich's picture

If the Romans had figured out how to use oil, none of us would be here.

3rdWorldTrillionaire's picture

I find this statement very fascinating... would you mind expanding on what you mean by "here"? Also, is this based on anything you've read, some kind of alternative history theory or book? Would actually love to learn more about this... thanks in advance.

Tasty Sandwich's picture

Nuclear weapons.  If I'm going down, then you are too.

mtndds's picture

DOW is off the lows, its clawing its way back up.  The PPT is out in full force.  This market must end in the green for the day so that the people dont panic!!

KnuckleDragger-X's picture

There's plenty of reality, but it's not allowed anywhere near Wall St. I'm watching the market ticker and it looks like the PPT is fighting a helluva battle today......

Banker Buster's picture

Yes they are.  The market was deciding is this the day we are going to breakout into the correction and break through this trading range or go back up into it with today just being the end of the second leg down.  PPT knew where they needed to turn it and that 60 minute, second and third hour today was where they concentrated their efforts, especially the last 5 minutes of the 3rd hour.  Bear failed there.  The triangle continues... 

aliki's picture

HYG 86.09 last ... magic # for that is 90.00 which we've been UNDER for quite a while. im sure $100.00 oil is right around the same corner that the "great rotation out of bonds, into stocks" is. that will come & save the day. L O fucking L.

Utah_Get_Me_2's picture

Sooo September is gonna be a doozy..

Panafrican Funktron Robot's picture

High potential for a relatively typical budget shitfit around the Oct. 1st deadline may pile into this.

bnbdnb's picture

QE suppression of yields all around the world. Of course it will disconnect wildly.

buzzsaw99's picture

DOCTOR: Clevon is lucky to be alive. He attempted to jump a jetski from a lake into a swimming pool and impaled his crotch on an iron gate. But, thanks to recent advances in stem cell research and the fine work of Doctors Crenski and Ottschuler Clevon should regain full reproductive function.

Clevon: GET YOUR HANDS OFF MY JUNK! [/Idiocracy]

indygo55's picture

With all this talk about September/October crash from Armstrong to PCR and Stockman and hundreds if not thousands of blogs about the Shemitah bla, bla, the crash just might be blamed on a self fulfilling prophacy. I wouldn't be surprised if the FED comes out with Obama and state that it was the evil Internets and Blogger conspiracy wonks who made it all collapse. Everything was just fine right up until then. 

KnuckleDragger-X's picture

It doesn't matter if its self fufilling or who they blame, when shit happens, the FED will do the worst thing possible and President Zippy will declare a national emergency, then the fun will start......

Yancey Ward's picture

It is different this time.  In the breach, the Fed will buy junk.  Party on.

terry44's picture

Yes, it will be infinitely worse.

q99x2's picture

Dow 1450 = QE4

Amish Hacker's picture

Looks like the "catching down" phase will be fast & furious. Release the Kraken!