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"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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Wed, 08/12/2015 - 12:27 | 6418703 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

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

Wed, 08/12/2015 - 12:33 | 6418727 Tasty Sandwich
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)

Wed, 08/12/2015 - 12:46 | 6418780 silverer
silverer's picture

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

Wed, 08/12/2015 - 12:49 | 6418795 Tasty Sandwich
Tasty Sandwich's picture

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

Wed, 08/12/2015 - 12:58 | 6418832 3rdWorldTrillionaire
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.

Wed, 08/12/2015 - 13:09 | 6418857 Tasty Sandwich
Tasty Sandwich's picture

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

Wed, 08/12/2015 - 13:32 | 6418975 mtndds
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!!

Wed, 08/12/2015 - 12:57 | 6418828 KnuckleDragger-X
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......

Wed, 08/12/2015 - 13:24 | 6418941 Banker Buster
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... 

Wed, 08/12/2015 - 13:18 | 6418923 VladLenin
VladLenin's picture

Only on TV

Wed, 08/12/2015 - 12:30 | 6418712 aliki
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.

Wed, 08/12/2015 - 12:35 | 6418734 Utah_Get_Me_2
Utah_Get_Me_2's picture

Sooo September is gonna be a doozy..

Wed, 08/12/2015 - 12:51 | 6418803 Panafrican Funk...
Panafrican Funktron Robot's picture

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

Wed, 08/12/2015 - 12:38 | 6418744 bnbdnb
bnbdnb's picture

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

Wed, 08/12/2015 - 12:45 | 6418774 buzzsaw99
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]

Wed, 08/12/2015 - 12:48 | 6418787 indygo55
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. 

Wed, 08/12/2015 - 13:02 | 6418847 KnuckleDragger-X
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......

Wed, 08/12/2015 - 12:48 | 6418788 indygo55
indygo55's picture

repeat

 

Wed, 08/12/2015 - 12:51 | 6418801 Yancey Ward
Yancey Ward's picture

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

Wed, 08/12/2015 - 12:57 | 6418830 terry44
terry44's picture

Yes, it will be infinitely worse.

Wed, 08/12/2015 - 13:11 | 6418886 q99x2
q99x2's picture

Dow 1450 = QE4

Wed, 08/12/2015 - 13:22 | 6418933 Amish Hacker
Amish Hacker's picture

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

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