If The High-Yield Bond Market Is "Fixed", Explain This...?
Remember a week ago when every TV anchor, pundit, asset-gatherer, and commission-taker stormed onto mainstream media and proclaimed the credit market collapse "fixed" because prices had 'stabilized' over the holiday period "proving that 3rd Avenue was a one off" and this dip was a buying opportunity? Yeah, well that was all complete crap... as Investment-Grade cost of funding hits a 3-year high, HY bond spreads blew out to cycle wides, 'triple-hooks' soared to their worst levels in almost 7 years, and credit protection costs rose by the most in years.
"Stabilized" (during the Christmas break) was the new "everything is awesome"... but now...
High Yield Bond ETFs are dumping...
The cost of high-yield credit protection is soaring...
Equity prices are starting to catch down to that reality...
As is the cost of equity risk protection (VIX following August's "wait what" reality-wake-up call path)...
And that means trouble for the only pillar of non-economic stock buying left... Investment-Grade credit risk just hit 3-year highs crushing the economics of any debt-funded shareholder-friendly activities...
And finally, where it all started - CCC 'triple-hooks' credit spreads have re-spiked to cycle wides...
But apart from that - yeah, credit is "fixed."
(7 votes)
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Bond carnage straight ahead. QE in 5... 4... 3...
Clint: "Go ahead, make my day."
Go ahead…make my millennium! [/Beetlejuice]
OKOK Scooby is going to solve this caper. HGY is not a good sample to use for your analysis as it is mostly dumb money and some dudes hatching some derivative scams.
"High-yield credit protection is soaring". Of course it is, But only because Tyler is doing some stories on H.Y.C!
HAHA caper solved! Yeah Scooby!
Stealth bailouts coming. Even these lame brained, medicated up, iPhoned, distracted ibmecile sheep are not going to like another bailout.
Perhaps if nothing were said about it on TV? Hmmmmm?
If you've read the stuff buried in Dodd-Frank... those stealth bail outs are called bail-ins.
I was pondering this the other day, if it looks like the WH goes to Trump, which by their own admission neither party wants, why not hand him the shit sandwich? Pull it before the election, the worst case is it changes the outcome. Win/win if you're TPTB.
In any case, if you think the sheep didn't like bailouts... wait until the sheep with 401Ks get bail-ins. That'll be fun.
If Trumps wins, AND his security team does somehow manage to keep him from eating lead, he will get the steaming pile.
Hopefully he get's a wild idea and takes Icelands regulatory approach to the next crash.
But I'm not holding my breath.
I think they get a dead Chinese driver bounce this week with a small rally then badaboom badabing we go downtown through the August lows as the Banksters report next week.
So who's taking credit for all of this?
Get out of this market and move to cash asap!!!
HY Credit Protection
Laugh My Ass Off!!
that shit NEVER pays. only a total dumb fuk would buy that crap.
If you mix it with enough SPAM though...you can feed a nation.
Time to reload the ink pack, start printing Yellen
The pundits are correct, they've been "fixed" all right. Ever since the Fed began ZIRP. Not in the sense of "repaired," but in the sense of "the fix is in." As in Bernanke swindling the life savings of working Joe's past and future, so the investment banksters could peddle junk at rates as if it were AAA so that corporations can do buy-backs to pump their shares. The problem is, the scam isn't working anymore.
I imagine people are going to buy USA bonds, not corporate bonds. Corporate bonds correlate too well with the S&P, which is going down.
Maybe people figured out the debt was mostly fueling buybacks, dividends, and other fields of poppies. It's a bitch when they look behind the curtain.
Yes, indeed.