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Credit Suisse Is "Worried" These Two Charts May Abort The Fed Hiking Cycle
Despite the bloodbath in corporate credit markets, talking heads remain cognitively dissonant as to the reality lurking under the surface of this colossal leap in cost of funds for every firm. However, Credit Suisse is "worried" about the implications of these two disheartening charts expose, suggesting a default environment that might abort the Fed hiking cycle - which in this case is not a market-reassuring outcome.
As Credit Suisse's William Porter explains, the percentage of North American companies losing money on an LTM basis in Q3 rose to a cycle high, while the ratio in Europe stayed stable, at the low end of its recent range.
The burden of this is the correlation with the default rate. Moody's 2016 forecast is 3.8% but the relationship with this ratio now suggests something much higher, and we watch that outcome as a risk. Arguably the only market remotely priced to a much higher default rate as an outcome is US rates.
This is not a forecast, but an observation and a watching point. With the ECB now apparently less friendly as we examine below, we become more cautious ahead of the presumed Fed hike on 16 December, particularly in terms of total return dynamics.
Ironically, if defaults were to rise to anything like the degree this analysis suggests, it might abort the Fed hiking cycle which is a source of concern for the credit market. But we would hardly take this as a reassuring outcome.
There is a theme at present that credit is leading other markets, and is predicting "recession." We are worried...
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Rothschilds did 9/11 #nothacked
Mossad caught on 9/11 with truck bombs (google Israeli truck bombs)
Unreacted super thermite found in the dust and peer reviewed in Bentham Open Physics Journal
Neocon think tank PNAC stated a need for "Catalyzing catastrophic event" 1 year before 9/11
Bibi Netanyahu said 9/11 attacks "very good for Israel"
Suck a fart out of my ass Zionists.
Pharisees love the notion of the law, and find it appropriate that you live by it, yet distain to apply it to themselves, because they cannot possibly live by that very same law.
For none is righteous, no not one.
Yes, they like their slaves to be constrained by rules that do not apply to them.
Who bought AP and Reuters? Who owns Hollywood? Who controls the "alternative media"? Who owns the central banks of the world? Who did Lord Balfour promise Palestine to? Who built the Knesset and the Israeli Supreme Court?
Downvote away you sad, ignorant, goy monkeys.
No debate, just downvotes?
Fucking pussies.
People are waking up. They are also destabalizing Europe, again.
https://www.youtube.com/watch?v=bm34sj65MkA
Looking for attention, are we?
Who's a big boy? Yes, you're a big boy.
https://www.youtube.com/watch?v=Zu6KXj-vtl8
It seems Sunday night is Fed rate hike hedge night. Suddenly a done deal ain't so done.
What happens when something priced in is not priced in?
Panic? Mrs Cog has promised me she'll let me know when to panic.
<What's that you said honey? The market is manic?>
One of my friends from AA (and an Obama supporter) asked me a couple of weeks ago if I thought the Fed should increase interest rates. He was of the opinion (garnered from CNN no doubt) that this would save the economy.
I gave a good answer, which like all goods answers, is something he didn't want to hear.
"I heard a saying the other day that goes like this. If politicians can get people asking the wrong questions, the answers don't really matter"
What do you mean, he said.
Politicians are good at presenting people with two opposing questions to debate around the water cooler. If people have two things to debate, they NEVER ask a third question.
The question we should be asking is this. We have been told the economy has been in a recovery for the last seven years. If we were in a true recovery, the interest rates would already be normal. Or at the least 3 or 4 percent. And here we are debating whether a lousy quarter point is going to save the country.
Wrong question.
He was quite for a long time.
If we were in a normal cycle, we'd have been well through the recovery phase and dealing with a hotter cum aging part of the expansion phase.
So, exactamundo. There is no "7 Years of Recovery" unless it's a Brad Pitt movie set in Tibetostan where Angela Jollie collateralizes her ex-titties in exchange for a bucket of yak paste.
Amazing, no?
Now they're afraid to raise rates because they'll wind up back at zero.... which is exactly what they wanted to do anyhow, is to raise rates so that they could lower them later if it all turned brown, sticky and smelly.
WTF is Wrong With These People?
WTF is wrong with these people? Easy knuks,
The Federal Reserve employs over 300 PhD economists...
The. Fed. Cannot. Normalize. It's too late.
They never could. Once they went to zero and then started QE4EVA the possibility for a significant rate increase evaporated. It has been all talk and no walk ever since.
The Fed aka the darkest Black Comedy of them all.
Fed. Cannot. Normalize.
5 decades beyond normal...
The Gold standard provided a littlle restraint.
It doesn't matter what they do now. Sgt Hulka with the big toe is going to plant it in our ass.
It will impossible for the FED to rate hike out of the ZIRP black hole that the FED created - they may start, but they will not be able to finish. Great opportunity to profit in capital gains from treasuries again.
By Jove, He's Got It!
Watch out, we're on the global express to Negative Interest Rates!
Probably nothing. Worry warts. /s
Every time I see one of these scary charts or read one of these frightening articles, my heart goes all pitter-patter, racing wildly and arrhythmically. I start hyperventilating and pacing the floor. By the end of the evening I'm under the table, opening another can of Mountain House rations and shaking like a fucking leaf.
What do you veterans on here recommend for this condition?
Whatever you've got can't be fixed with a few posts on a forum mate.
Preppers are calm and collected because we've already planned for almost all contingencies. You ain't one of them.
His name was AmerikanPatriot amongst many others.
Tyler has booted him before.
He is a troll.
GlenLivet 12, one ounce at a time, neat, until the condition passses.
A separate glass of branch water allowed, but don't mix the two.
Works for me.
CS has one of the best nest of analysts on the planet. I mean it. They probably read ZH comments all the time. :)
How many times have they aborted the rate hike now? I lost count. They might even try a little hike and then use the resulting shitstorm to implement QE-extra large tampontm to absorb all the blood in the markets. The thing about sociopaths/psychopaths (I rarely make the distinction) is they have a tendency to go apeshit when their lies are exposed and this is a BIG one. I reckon they'd rather start WWIII than expose themselves to the scrutiny of the public after their untenable positions are revealed. They have no choice but to continue QE. End of story.
(From DSM-5, Diagnostic and Statistical Manual of Mental Disorders, 5th Edition)
Describes the nutjobs in government to a T.
Why audit the FED, when you have "popular agreement"?
The Fed. is toast/
Within 6 months we will be in NIRP.
I would tend to agree, maybe sooner.
The thing that really worries me is this incessant call for banning cash....
Cashless society + NIRP = slavery to nwo banker-politicians
The Fed is going to lift rates, and use dovish language, next week.
"Credit Suisse Is "Worried" These Two Charts May Abort The Fed Hiking Cycle"
hiking cycle? i must have blacked out (very raycyst) for the last 7 years
Why should all the rest of us have some concern for -- Credit Suisse? Why should CS be concerned the rest of us should be all concerned about -- Credit Suisse?
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp
Go to WANTA-Book.pdf
Begin at page 104. Extrapolate under your own cognizance ..
In the brave new world of really junky junk bonds, you don't default, you just pic 'n toggle. It's all good!