This page has been archived and commenting is disabled.

One Of Worst Monthly Sell Offs In High Yield Market's 25 Year History Implies "100% Probability Of Mild Recession"

Tyler Durden's picture


More flashing red recessionary indicators are coming courtesy of the largely ignored High Yield market, which following a 5.3% decline is, as Bank of America (itself ironically contributing substantially to the blow out) says, is shaping up to be "among the worst months in the HY market's 25 year history, in a bad company of post-Lehman, post-WorldCom, post-9/11, and post-Russia sell-offs. The difference of course is that we did not have the largest bankruptcy in history taking place (LEH or WCOM shared that title at a time), no terror attack, and no outright sovereign default (Russia in Aug ’98). What we did have however, is a global risk-off trade, sparked by concerns that this fragile environment could slip into a double-dip recession as consumer and business confidence fails to sustain repeated beating from sovereign and financial systemic risk issues." What we also did have is the near end of the modern ponzi economic model, whose viability was once again extended courtesy of a variety of sticky objects thrown at the wall with hopes one sticks. For now the obliteration has been halted, although one thing is undeniable - central planner intervention buys increasingly less and less time. We are confident that August is just the beggining of pain for not only HY, but all other asset classes. And some more ammo for those who like comparing 2011 to 2008: "Parallels are being drawn between today’s environment and that of 2008, given the degree of equity destruction that has taken place across the financial space. Financial CDS – the epitome of ’08 systemic risk – are trading at an average of 190bp in the US, within reach of Oct ’08 levels, and 240bp in Europe, well north of their ’08 wides." What do spreads imply? Nothing short of recession: "The HY index, in the meantime, has widened to 739bp as of close on Thursday, its widest level since Nov 2009. With the spread normally peaking at 1,000bps in full recessionary periods2 (1991 and 2001-02) and bottoming at 250bp in times of strong economic growth, the current level is pricing in an 80% probability of a fullblown contraction in GDP, and a 100% chance of a mild recession."

And some more disturbing observations from BAC's Oleg Melentyev:

BB-BBB spread at recessionary wides


Relative spread between BBs and BBB, which currently stands at 311bps compared to the historical average of 170bp (Figure 2). More importantly, this differential tends to peak at around 300bps in full recessionary periods (1991, 2001-02) except for 2008 market meltdown episode. In other words, judging from this particular pair, the HY market is pricing in a full-blown recession at this time, ie. there is very little downside left in this relationship, unless we get a full-blown replay of 2008, which we consider to be an unlikely development.


HY prices in a 7% default rate by this time next year


By our estimate, assuming a 30% recovery – well below recent 50%-plus readings – this market can sustain a 7% default rate over the next year and still provide investors with 270bp of excess spread – the historical average compensation over future credit losses it offered over the past 25 years (Figure 1).


Our views going forward


The risk of seeing the US and EU economies slipping into recession has increased significantly over the past few weeks and we will be watching incoming high-frequency economic data very closely as we weigh any changes to our default rate and spread forecasts. Even more importantly than econ data, which will only show the picture ex-post, it is extremely important to see recent volatility in markets and wealth destruction it brings coming to an end. Today’s worst reading on UMich Consumer Confidence index in 30yrs is a blunt reminder of dangers the uncertainty brings whether it comes from Rome, Washington, or New York, let alone when it’s all of the above.


And now, the media's spin job, should it choose to accpet it, is to spin a "mild recession" as bullish for stocks.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 08/16/2011 - 15:21 | 1566481 sellstop
sellstop's picture

We've already had the mild recession.

Precisely NOW is a good time to buy MCP.


Tue, 08/16/2011 - 16:48 | 1566711 max2205
max2205's picture

Sicky Objects!!!!

Tue, 08/16/2011 - 15:23 | 1566485 FoieGras
FoieGras's picture

High Yield may be a buy around here. Certainly better outlook than equities.

Tue, 08/16/2011 - 15:48 | 1566540 pslater
pslater's picture

High yield bonds are basically plays on smaller and mid cap stocks where most of your total return comes from income rather than capital gains.  With corporate profit margins peaking three quarters ago, I'd be very careful of the HY space.  I would even suggest that this is a great time to sell HY...

Tue, 08/16/2011 - 16:35 | 1566684 Greater Fool
Greater Fool's picture

Would stay away from convertibles as they will still be reflecting equity prices and high vols, but otherwise yes, HY is a good place to look when the tide of liquidity goes out. But only if you are willing to risk a very large mark-to-market loss if another credit shock comes down the line.

Tue, 08/16/2011 - 16:59 | 1566747 CrashisOptimistic
CrashisOptimistic's picture

Prices of HYG, the HY bond ETF:

1 January 2011 :  $90.29

16 Aug 2011:  $86.22     

Difference $4.07  This looks like -4.5% for the year so far at first glance

But at second glance it paid $4.06 in monthly distributins since 1 Jan, not including 1 January's payout.

This means the loss is about 1 penny year to date.  

The S&P closed 2010 at 1257 and it's 1188 today.  That's minus 5.5%.  It also pays out dividends and the yield is about 1.8% as I recall.  So 7/12 of the year is past which would be 1% of that 1.8.  

One way or another HY is outperforming the S&P. 

Tue, 08/16/2011 - 15:24 | 1566487 dcb
dcb's picture

one of the things that should have been elimated with the financial crisis is high yeild. you knew we were in a bubble and there was too much credit around when they started leveraged loans again

Tue, 08/16/2011 - 15:24 | 1566490 Sudden Debt
Sudden Debt's picture

Mild, like in a mild hart attack or mild stroke?

Tue, 08/16/2011 - 15:26 | 1566499 Pladizow
Pladizow's picture

Mild Rape!

Tue, 08/16/2011 - 15:29 | 1566515 Long-John-Silver
Long-John-Silver's picture

During or the morning after sex?

Tue, 08/16/2011 - 15:49 | 1566539 Sudden Debt
Sudden Debt's picture

if they sleep over, the morning sex is like paying rent!

And during the sex is is somehting that happens if you didn't buy them enough beers.


Tue, 08/16/2011 - 15:40 | 1566528 Dasa Slooofoot
Dasa Slooofoot's picture

Mildly pregnant.

Tue, 08/16/2011 - 15:58 | 1566568 In Fed We Trust
In Fed We Trust's picture

What does 2.3 trillion dollasrs buy you?


Just ask Donald Rumsfield in this here funny video...

Tue, 08/16/2011 - 16:41 | 1566697 Sudden Debt
Sudden Debt's picture

What does 2.3 trillion dollars buy you?

A second term.

Tue, 08/16/2011 - 15:43 | 1566529 Gubbmint Cheese
Gubbmint Cheese's picture

"A light dusting of downs syndrome"

Adam Carolla

Tue, 08/16/2011 - 15:55 | 1566557 Manthong
Manthong's picture

"A light spray of hydrofluoric acid"

Tue, 08/16/2011 - 16:12 | 1566618 baby_BLYTHE
baby_BLYTHE's picture

Holy crap, we got Adam Carolla fan in the house? Reps!

"The world is your oyster…because that’s all the world is."- Adam Carolla

Tue, 08/16/2011 - 16:35 | 1566686 Vic Vinegar
Vic Vinegar's picture

In Fifty Years We'll All Be Chicks...recommended reading for even the most scholarly amongst us.

Tue, 08/16/2011 - 15:24 | 1566491 vast-dom
vast-dom's picture


Tue, 08/16/2011 - 15:24 | 1566494 SheepDog-One
SheepDog-One's picture

We've already had the mild recession, now time to face reality and see we're in the greatest depression!

Tue, 08/16/2011 - 15:26 | 1566498 SheepDog-One
SheepDog-One's picture

Remove the ZIRP and QE flooding into bank vaults and see what the 'mild recession' is in reality, total full blown depression.

Tue, 08/16/2011 - 16:07 | 1566603 Dr. Richard Head
Dr. Richard Head's picture

You can remove ZIRP and QE now because SNAP is stimulus, at least according to Obama Ag Secretary -


Tue, 08/16/2011 - 16:29 | 1566665 pods
pods's picture

If you remove SNAP, Rome burns tomorrow.  


Tue, 08/16/2011 - 16:49 | 1566715 Dr. Richard Head
Dr. Richard Head's picture

It was tried in Atlanta, GA due to a "glitch" in the system and boy did the natives get restless.  I would provide the video, but it has been removed from YouTube due to copyright infringement.  I tried to locate from the FOX affiliate in Atlanta, but it has been removed from there as well.

Joke 'em if they can't take a fuck - Robin Williams.

Tue, 08/16/2011 - 16:54 | 1566726 karzai_luver
karzai_luver's picture

fireball bitchezzzzzzzzzzzzzzzz!



Tue, 08/16/2011 - 15:37 | 1566500 Mercury
Mercury's picture

But wait!....what’s that rolling across the heartland of America?......its…..the economic grim reaper mobile?!...


Citizens and comrades…surrender your liberty and property….resistance is useless!


Tue, 08/16/2011 - 15:42 | 1566526 dwdollar
dwdollar's picture

Haha...  It's like Darth Vader's bus.  He's coming to your town to find some rebel scum.

Tue, 08/16/2011 - 15:51 | 1566546 Mercury
Tue, 08/16/2011 - 16:05 | 1566594 andybev01
andybev01's picture

If I had $1.1 mil to drop on a ride it would be this:

Tue, 08/16/2011 - 16:09 | 1566610 Mercury
Mercury's picture

There's one in the back of the bus.  When they drive close to cities Barry likes to play Night Rider.

Tue, 08/16/2011 - 22:59 | 1567740 JW n FL
JW n FL's picture
by andybev01
on Tue, 08/16/2011 - 16:05


If I had $1.1 mil to drop on a ride it would be this:


that car is NOT! $1.1 million.. that is a super sport.. it is not a regular Bugatti.

the carbon fiber hood is the give away.

Tue, 08/16/2011 - 15:27 | 1566501 Cdad
Cdad's picture

I heard 1 in 3 chance of recession.  I heard it about 20 times, and I read it about twenty more times.  However, these sources were all criminal banker types, syndicate analysts, and rating agency clown types.

So agreed...100% is a lock.  And if the debt bubble bursts in Europe, severe depression.

The fact that equities continue to ignore credit is shades of 2008....and so unbelievably stupid as to cause me a high level of concern for floor traders.  Since my tv recently became a radio, can anyone confirm whether or not Steve Grasso at the NYSE is wearing a hockey helmet and mouth gaurd?  Thanks.

Tue, 08/16/2011 - 15:46 | 1566536 SheepDog-One
SheepDog-One's picture

All is a calm line on the floor, probably end up all green as robots relelntlessly bidding up everything in sight like winos in an alley with a magically refilling bottle of Night Train. Its a hobo miracle market!

Tue, 08/16/2011 - 16:07 | 1566604 Cdad
Cdad's picture

Poor Steve...he has been trying to rope folks into AK Steel for weeks.  He owns it.  He really should be wearing one of those hockey helmets that I donated to the NYSE last year for all the "special" guys on the trading floor...standing in the center of the room clapping for themselves.

Did you see how sickly those last two hours were, Dog?  I mean, puking up spaghetti and Jack Daniels while passed out on your back on the couch sickly, man, with a plastic bag over your head even.  That was one of the worst attempts at a fake bounce back that I have ever seen.

Fuck me, Dog.


Tue, 08/16/2011 - 17:15 | 1566781 SheepDog-One
SheepDog-One's picture


Tue, 08/16/2011 - 15:29 | 1566509 Long-John-Silver
Long-John-Silver's picture

We recovered from the 2008 recession?

Tue, 08/16/2011 - 15:45 | 1566533 Sudden Debt
Sudden Debt's picture

that was just a soft patch. It was the media who blew it out of proportion...


Tue, 08/16/2011 - 16:30 | 1566670 Crack-up Boom
Crack-up Boom's picture

You mean a "soft patch" like the la brea tar pits?

Tue, 08/16/2011 - 21:11 | 1567448 knukles
knukles's picture


don't forget transitory

Tue, 08/16/2011 - 15:29 | 1566512 Joe Davola
Joe Davola's picture

Is it like a mild concussion - one someone else has?

Tue, 08/16/2011 - 16:32 | 1566673 pods
pods's picture

Of course, with the way that they refuse to flush out all the bad debt hidden away, this is going to be more like a mild case of herpes.


Tue, 08/16/2011 - 15:30 | 1566516 You Lie
You Lie's picture

The global financial system has become whack-a-mole.     And the game is speeding up.

Tue, 08/16/2011 - 15:31 | 1566519 Johnny Lawrence
Johnny Lawrence's picture

Speaking of recession, Obama reversed it until he hit "bad luck":

At a town hall meeting on his campaign-style tour of the Midwest, President Obama claimed that his economic program "reversed the recession" until recovery was frustrated by events overseas.  And then, Obama said, with the economy in an increasingly precarious position, the recovery suffered another blow when Republicans pressed the White House for federal spending cuts in exchange for an increase in the national debt limit, resulting in a deal Obama called a "debacle."

"We had reversed the recession, avoided a depression, gotten the economy moving again," Obama told a crowd in Decorah, Iowa.  "But over the last six months we've had a run of bad luck."  Obama listed three events overseas -- the Arab Spring uprisings, the tsunami in Japan, and the European debt crises -- which set the economy back.


Also, high yield correlates very highly to the equity market.  When the equity market sells off, so does high yield.

Tue, 08/16/2011 - 15:44 | 1566531 nantucket
nantucket's picture

here's a little tidbit about "bad luck" appropriate for the Obama bad luck comment


"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.  This is known as “bad luck.”

Tue, 08/16/2011 - 15:50 | 1566543 SheepDog-One
SheepDog-One's picture

Well as long as 'poverty' is defined as not having the latest version of the IPad, yea. 

Whenever the tiny percentage is kept from 'creating'....creating what? Debt slavery? I'd far rather live on a ranch farm and have some peace and quiet rather than the pointless rat race to beat the Jones' in number of useless trinkets purchased on credit. 

All baubles and bullshit.

Tue, 08/16/2011 - 15:51 | 1566547 caerus
caerus's picture

i'm with you...grew up on a's a good life...

Tue, 08/16/2011 - 15:58 | 1566550 SheepDog-One
SheepDog-One's picture

BTW I have to ask Nantucket...just who are these 'tiny percentage of 'creators' who whenever theyre 'driven out of a society' always results in that society becoming poverty stricken? 

Those who have always created central banks and fiat currency and fractional lending? 

Who are they? These 'creators'?

Tue, 08/16/2011 - 16:04 | 1566589 nantucket
nantucket's picture

so how many people do you personally know that have created/invesnted something that has changed the world?  Not many, huh?  It' because there are so few.  What percentage of people do you estimate have made transformative inventions that greatly contributied to mankind?

Once again, some numb nuts has picked his pet peeve issue (fiat currency, fractional a-hole yada yada) and ASS-sumed the quote was referring to that.

C'mon boys and girls, think before you verbal diarrhea; this is the UFC of forums, don't come light cause you'll get housed.

Tue, 08/16/2011 - 16:08 | 1566595 SheepDog-One
SheepDog-One's picture

So if these 'creators' are so great, why do they then get driven out of society? And where did they go? Simply dont know who or what youre talking about, no need to get all butthurt about it. 

Tue, 08/16/2011 - 16:24 | 1566655 Cdad
Cdad's picture

don't come light cause you'll get housed.

Great...'cause I'm homeless just now.  Where's the link to my voucher? 

Tue, 08/16/2011 - 16:34 | 1566678 caerus
caerus's picture


Tue, 08/16/2011 - 17:17 | 1566787 SheepDog-One
SheepDog-One's picture

A lot of us could use your housing! I dont know if youre all 'UFC' now because you bought a Tapout hoodie or what, but whatever enjoy.

Tue, 08/16/2011 - 15:58 | 1566569 nantucket
nantucket's picture

totally wrong interpretation on your part.  it has nothing to do with ipads, debt slavery, or trinkets.  The quote is quite old and refers to 5,000+ years of human history....not exclusively the last 10-20 years of fantansy circle-jerk land.  I guess your dream ranch didn't benefit one iota from the myriad inventions over the past 1,000+ years that allowed humans to live grow better, harvest better, work safer, etc, etc. etc.  and generally lead better lives.  Jag.



Tue, 08/16/2011 - 16:02 | 1566576 SheepDog-One
SheepDog-One's picture

LOL! Huh? Someone else invented everything to make my live better than it otherwise would have been 150 years ago? Who are they? And what were these great 'creations'? And if theyre so great, then why do they get driven out of society, as per your statement?

Tue, 08/16/2011 - 16:02 | 1566580 caerus
caerus's picture

last i checked...cows eat grass...

Tue, 08/16/2011 - 16:04 | 1566582 SheepDog-One
SheepDog-One's picture

And these 'creators' created...grass? But then were driven out of the society?  Who are these people?

Tue, 08/16/2011 - 16:04 | 1566592 caerus
Tue, 08/16/2011 - 17:38 | 1566830 vast-dom
vast-dom's picture

SheepDog: please. Just stop. You and NAntuck sound like morons. Just stop taking up valuable space. Get each other's emails and duke it out.

Tue, 08/16/2011 - 15:43 | 1566530 caerus
Tue, 08/16/2011 - 15:47 | 1566537 Dasa Slooofoot
Dasa Slooofoot's picture

@Tyler, you see what Noriel Roubini tweeted:

We will never go back to a gold standard: good riddance as economy & markets were much more unstable & prone to crises during gold standard


Tue, 08/16/2011 - 16:17 | 1566630 baby_BLYTHE
baby_BLYTHE's picture

He will eat those words.

Besides, didn't he call a 'bubble' in gold with a top of around 1300-1400? He was dead stinking wrong.

Marc Faber Nov 2009: "Gold will never again go below $1,000 per ounce"

Tue, 08/16/2011 - 17:19 | 1566796 disabledvet
disabledvet's picture


Tue, 08/16/2011 - 16:26 | 1566659 Smiddywesson
Smiddywesson's picture

Roubini is wrong.  We are going back to some sort of a gold standard.  Arguing semantics is ridiculous.  The central banks sure aren't plowing paper into tradition for the fun of it.

Tue, 08/16/2011 - 15:49 | 1566541 stant
stant's picture

libertarian island means my little hill in ky surrounded by a sea of rising sewage. its not mild

Tue, 08/16/2011 - 15:50 | 1566544 JW n FL
JW n FL's picture

President Hugo Chavez has celebrated that the Unified Regional Compensation System (Sucre) is being evaluated by the Union of South American Countries, Unasur. According to Chavez, the adoption of a single currency like the Sucre has the potential to become a tool to shield the region from the financial crisis caused by the global economic meltdown originated in the U.S. and Europe.


America's Reserve Currency Status is under attack ALL around the Globe!

All this so the Republicans could get some TV air time?

All this to hold up Printing Money?

ALL! those Lobby Whores were ALWAYS going to Print!

Now the Banks will get even MORE Tax Dollars out of "We the People"!

Washington DC is and had been BROKEN!

When will YOU! get off YOUR Fat Lazy Ass and start fighting back? call me when YOU are ready! I wanna go with you!

Tue, 08/16/2011 - 15:54 | 1566552 JW n FL
JW n FL's picture

Israeli warplanes have launched a series of air strikes on the Gaza Strip.

Medical sources in Gaza said one man was killed and at least seven others including a woman and a five-year boy were wounded.

Israel needs to re-unite itself (while 300 - 400 thousand Israeli's Protest in Israel) so provoking the extremists is the purpose of the new attacks.

AIPAC Sends 81 Members of the US Congress on Vacation!

1/5th of Congress! is going to Israel the Largest single recipient of US AID!!

For many years the American media said that “Israel receives $1.8 billion in military aid” or that “Israel receives $1.2 billion in economic aid.” Both statements were true, but since they were never combined to give us the complete total of annual U.S. aid to Israel, they also were lies—true lies.

Recently Americans have begun to read and hear that “Israel receives $3 billion in annual U.S. foreign aid.” That's true. But it's still a lie. The problem is that in fiscal 1997 alone, Israel received from a variety of other U.S. federal budgets at least $525.8 million above and beyond its $3 billion from the foreign aid budget, and yet another $2 billion in federal loan guarantees. So the complete total of U.S. grants and loan guarantees to Israel for fiscal 1997 was $5,525,800,000.

Who Onws YOUR Favorite Lobby Whore!

Dont search the guy you hate! search the guy you LOVE and see how long you continue to LOVE him!

They are ALL Bought and Paid for Whores who are out to SCREW! "We the People" as often and as hard a possible!




Tue, 08/16/2011 - 15:57 | 1566565 SheepDog-One
SheepDog-One's picture

Oh my goodness, thats 'anti semetic', or something.

Tue, 08/16/2011 - 16:09 | 1566611 Sudden Debt
Sudden Debt's picture

no no, they called them Israeletic or something and not "Jews". If you call those Jews Jews that's semetic anti stuff.

I don't know why.... must be because Jews don't like to be called Jews unless it's another Jew who calls them Jew.

I never really figured that one out... you must be a Jew to understand that Jewish kind of logic.

Tue, 08/16/2011 - 16:16 | 1566624 andybev01
andybev01's picture

Not one to deny a person his spew but what has this have to do with the topic?


Perhaps you might find a more sympathetic audience here:

Tue, 08/16/2011 - 19:25 | 1567159 slewie the pi-rat
slewie the pi-rat's picture

man who pisses into wind
have pauly walnut shoelaces

besides, he may have thought people didn't know yet
like moi

some of us no longer use MSM
other continue to pay well to be conditioned 24/7
since i didn't hit any of the links, i just came away with

Israeli warplanes have launched a series of air strikes on the Gaza Strip.

then i saw what you wrote
sounds like maybe you don't like jay-dub being here
if so, getting to be quite a crowd, isn't it?

Tue, 08/16/2011 - 23:10 | 1567768 JW n FL
JW n FL's picture

if he posts 20 one line drivel personal attacks he gets a discount on a "I Hate J Dub" Tee-Shirt!


Tue, 08/16/2011 - 23:16 | 1567774 JW n FL
JW n FL's picture

Bro? you know that is Iran News? it is like CNBC + CNN + FOX but backwards! Bro! it is the shiizzel!

Like! -->

A first trip to Iran for Russian Security Council Secretary with plenty on the agenda. From issues of mutual interest including the Bushehr nuclear power plant to regional and international developments. A wide range of issues were discussed in two rounds of talks between Nikolai Patrushev and his Iranian counterpart Saeed Jalili while for reporters the spotlight was on Iran's reaction to Russia's proposed step-by-step approach to resolving the West's nuclear standoff with Iran.

Tue, 08/16/2011 - 21:12 | 1567421 slewie the pi-rat
slewie the pi-rat's picture

what is the topic?  the probability of recession

you've posted twice, and if you've addressed it, i sure don't see where. 
"not to deny a person his spew", but perhaps you would be happier at another site;  here, if you call a person's post spew you might want to explain why you judge it to be such.  maybe it is spewwhy? 

you may be some kinda "authority" here to some, but you're not, to me, and your unwillingness to explain in more detail why you are shitting on someone makes you look quite unsuited even to be cracking jokes around here

now, to the topic:  recession on...recession off...recession on...  (remind anyone of anything?)  back in may, some here began to grok that fuk_u and the disaster in japan was neither "minor" nor transitory, which may explain why TPTB do not want anyone to understand the Real until they finished fading it, aka now, although there is still only abt 2% truth.  since the "minutely expansionary" data were not adjusted for Real inflation at the time, and the "going negative" data were discounted due to the expansionary data (of course),  i agree w/ tyler, in spite of the probability of getting struck by lightning, again, that the recession began in june.  i may be wrong.   but tyler?  besides, he called it, in real time, right here in liver city.  and so did others, including moi

i thnk we can also see that until the US economy can support the goobermint without debt, we don't have much of an "economy" now, do we?  personally, i think this fact is more important than some "GDP" bullshit where every fuking dollar spent by the goobermint  = $1 GDP.  we need to cut back goobermint and goobermint spending.  yesterday.  if that "causes a recession" so be it, at least it might keep us from a more severe Depression.

Tue, 08/16/2011 - 23:02 | 1567744 JW n FL
JW n FL's picture

being new at fight club.. you are supposed to fight.. but you would have to post something tangible to be able to fight.. so??

balls in your court, sport.

Tue, 08/16/2011 - 16:48 | 1566710 Alex Kintner
Alex Kintner's picture

Just to review... In 2008 we had a deep recession so they made the Taxpayers borrow $4Trillion and give it away to the Morbidly Rich. Is that the plan again? Or do they just plan to raid the Social Security Trust fund this time then declare it bankrupt?

Tue, 08/16/2011 - 16:53 | 1566721 max2205
max2205's picture

Yes and yes....

Tue, 08/16/2011 - 16:57 | 1566736 Alex Kintner
Alex Kintner's picture

Dammit. Doubling Down. They've moved from Looting to Grave Robbing.

Tue, 08/16/2011 - 17:29 | 1566809 disabledvet
disabledvet's picture

Open a margin account buy HSBC (symbol HBC) on any financial collapse/bailout news.

Tue, 08/16/2011 - 17:35 | 1566822 sitenine
sitenine's picture

What's the implied probability of Depression?

Tue, 08/16/2011 - 20:54 | 1567386 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

The BAC analyst's comments read like an insolvent train wreck barreling down the track. I can't say I've ever seen such a struggle putting lipstick on a pig.

"Even more importantly than econ data, which will only show the picture ex-post, it is extremely important to see recent volatility in markets and wealth destruction it brings coming to an end."

Bad news, Oleg. Wealth destruction has but begun.

Do NOT follow this link or you will be banned from the site!