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Junk Bond Prices Tumble To 2009 Levels
With the biggest single-day drop in over 4 years, US High-Yield bond prices have collapsed to their lowest levels since July 2009. Crucially, it's not just energy companies as the painful illqiuidty has careened across the entire space, not helped by fund liquidations and the biggest outflows since August 2014.
As we warned here, and confirmed here, something has blown-up in high-yield...
With the biggest discount to NAV since 2011...
The carnage is across the entire credit complex... with yields on 'triple hooks' back to 2009 levels...
As fund outflows explode..
And here's why equity investors simply can't ignore it anymore...
It is getting harder to ignore that this isn’t just about crude oil prices and the death of “transitory.”
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"S&P ..... must.... not.... breach.... 2020 point level.
Help us BTFD....thank you"
Sincerely,
PPT
Just wait till all those IG bonds start defaulting and everybody on Wall St. starts really panicking. Considering how things works now the S&P will set an all time high when it happens......
I think with all the good news today I say DAMN the torpedos and raise a full 100bps
The suspense is killing me. Are algos going to run the stops below 2020 today?
........and, it's gone!
Are we finally at the end game? Looks like it.
Bring it!
The simple answer is, no QE, no one buying. The asks were hit mearly to flip it to the Fed at a profit.
No liquidity FOR YOU!
Time to raise those rates, the world is waiting and we will not accept another punt. If you punt this time, credibility is lost and we will dump the dollar. - Signed the entire world. We'll be watching.
Santa almost hit a mountain testing out his sleigh... he may have to stop and change his underwear which means cancel christmas kids...
Or look at it this way: High yields going way higher.
http://stockcharts.com/h-sc/ui?s=HYT&p=D&yr=3&mn=0&dy=0&id=p10826878860
http://stockcharts.com/h-sc/ui?s=HYG&p=D&yr=3&mn=0&dy=0&id=p35181056316
At this point the Fed needs to pre-announce no rate hike and more QE, or it is going to have to buy every single asset on the planet.
Please, the owners behind the Fed do in fact want to "buy every single real asset on the planet"...
They just want them at firesale prices...
..and they want to pay with money that they created out of nothing with no real work...
It doesn't even sound plausible, but yet, here we are.
Sounds like a plan. I want to buy assets too and I'd like them at firesale prices. I salivate over oil overshooting to 12$
on the downisde. And silver overshooting to 8$. And gold to 700$. And copper to 1.25. And, and, and....
And the Robin Masters estate in Hawaii overshooting to 1mill$!
You've outed the playbook quite nicely, Laws.
A free round of new lows for everyone, on me:
http://stockcharts.com/freecharts/marketsummary.html
will it hit equity markets though? One would think but so far, nada. I think it is largely fallout from the oil & gas sector and not a broader reflection of the economy. When bond funds need to raise money theyre not just dumping Oil & Gas names. They need to indiscriminately sell and it's likely theyre selling some positions that have relatively outperformed.
Soon Equities will too. Right after the FED tightens then loosens then more QE then the whole thing collapses.
Outta NUGT small gain. Why no rocket from here with Spoos on the ropes?
getting quite dangerous here spider 2019ish. successful bounce from here could be a real moonshot very rapidly. no help from BKX and Russy at this point. Spending a lot of time at this 2018ish - 2022ish on the futs rearranging the chairs for the titanic or the apollo?
HELL, that is an easy question. Titanic was a real event. Apollo? not so much!
Ha, good point.
Never shoulda dumped all my TZA from days ago but I did for modest profits. Imagine there's a fuckload of stops set up for TZA fairly close below current levels as Russy been getting pounded.
https://www.collective-evolution.com/2015/12/10/stanley-kubrick-allegedl...
The hapless, yield-starved institutional muppets holding 8% junque bonds on unprofitable frackers will need to take a serious markdown to market as average junque rates soar past 17% and oil plummets to the low 30s.
Meanwhile, eight years after bankstermania, Proposed FASB Accounting Standard on Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement is scheduled to be issued on leap day 2016.
NB: AN extrmely high percentage of all US HY debbt is Energy, so Crude Oil prices are very important.