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High Yield ETFs Are Already Tumbling In The Pre-Market
Small doors, large crowds. Amid yet more liquidations (Brazilian Bank BTG flushing its European credit exposure and Lucidus US HY fund), the large high-yield bond ETFs are tumbling in pre-market as two years worth of under-water easy-money trend-followers head for the exits from the "highly liquid" ETFs.. . and crush what little liquidity there is in the underlying. When will The Fed step in and buy US HY debt to stymie "fire-sale" prices?
This will be the 8th drop in the last 9 days...
In the meantime, ponder the idea that there are still 19.6 million more shares of HYG and 41 million more of JNK than existed at the end of last year, and ask yourself what those holders are going to do in the coming weeks.
Then ponder on what professional holders of high yield and other credit will do after having gorged for the last several years only to see the wheels finally start to fall off.
Charts: Bloomberg
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Negative feedback loops are bitches, bitchez.
Welcome to the circus of high-yield/ high -wire acts!!!
HURRY! HURRY! HURRY! STEP RIGHT UP!
Oil under $35, HY cratering, I guess it's time to start dipping the toes back in biotechs and shale.
Nah, hold tight. It will take some time to punish that many smart people.
Actually, you have that backwards. This is a positive feedback loop. Negative feedback creates stability, positive feedback amplifies what is happening.
You forgot that this is an Orwellian world now. Up is down, positive is negative, etc.
Moar $$$$$$$$ QEIV 1.2 tr.
"When will The Fed step in and buy US HY debt to stymie "fire-sale" prices?"
Soon to come:
When will The Fed step in and buy US Treasuries to stymie "fire-sale" prices?
USTs will remain the haven for at least a few more years...
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Raise rates quick! /s
EDIT: haha: http://www.zerohedge.com/news/2015-12-14/socgen-looks-devastation-across...
Gold should be a good buy over the next few weeks
Gold has been in its own little negative feedback loop -
Why aren't the European markets tanking since they have a head start on the festivities?
Something doesn't seem quite right.
By the pricking of my thumbs, something wicked, this way comes.
Is it just me, but do any kind of metal coins look like the best way to store cash?
Fed's North Korean, own everything, economics will implode.
Blow those bubbles larger and large, then look surprised when they pop.
Like Bernanke's subprime housing is contained.
How did that work out ivy league PhD's?
This time, same game but larger and different.
Well, thank goodness it's all physical, at least they can all gather round the ole burn barrel in their torn over coats and fingerless gloves and each throw a few in to keep their hands warm.
Just imagine if it was something digital that was crashing ;-)
The SEC has proposed a rule on Friday, December 11, that would force ETF's to limit their derivatives exposure, possibly forcing most leveraged ETF's to close.
https://research.tdwaterhouse.ca/research/public/Markets/NewsArticle/166...
sorta like Black Friday sheep banging on the doors in a frenzy to be let in so they can unload their debt buying more crap on the shelves
SJB, son.
Better put some clowns with trampolines on wall st.
Just end of year window dressing...nothing to see here...Jan will be up 8%
What we are seeing is the effect of rates rising on their own, due to market pressure. Hopefully the days of only receiving 6-7% for a bond that should be paying 12-14% are over. These bonds have been over priced, and the cheap money that keep these schemes afloat is coming to an end.
Any of those $25 energy bonds trading below $5 yet?
I wonder how much of the Feds balance sheet 'other assets' in includes various ETF's. I feel like the Fed is the only owner of stocks at this point.
Bad Day at Black Rock 50% off sale: Coming soon here.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=Hyt&inst...
Then ponder on what professional holders of high yield and other credit will do....
Pray, pray and then pray some more that there are enough other managers in the same boat that when all is said and done regardless of whether they don't receive a bonus this year that they at least can keep their jobs.
Career-Safety in numbers.
Funny or not ..how gold and silver are not safe havens yet.....this junk bond crash is going to be big...and you watch more regulations on the way....
Would you consider "JSB" as a bet on the implosion? Just asking for your opinion..thanks.
If you don't mark it to market price, there is no problem.
The Bazooka is being primed and the Helicopters are on the launch pad.
Friday is options day as well. Should be fun watching the chaos this week.
My long run prediction is that the Fed ends up eventually trying to buy everything financial in one last catastrophic QE.
man they really are worried about the g.i. joe with the kung fu grip