Credit Is Crashing (And It's Not Just Energy Junk)

High yield bond prices are collapsing, but it is clear that liquidity has evaporated as traders have sent high yield bond ETFs (more liquid) dramatically below its fair-value as they seek hedges ahead of their liquidation needs.

Today is HYG's worst day since Brexit, with price crashing to lowest since April 2016... (HY risk nearing the key 500bps level)

And demand for more lioquid hedges has sent HYG below its implied value (as market participants use ETFs to cover their book because they can't transact in the cash markets)...

And it's not just energy junk - its systemic...

And it's time to start worrying...for stocks...

And VIX...