"Investors clamor for junk, as credit quality deteriorates rapidly"
After 2008, people blamed the ratings agencies for improperly rating debt and for not sounding the alarm. Now, the agencies have been sounding the alarm for two years, but the stoned Idiocracy doesn't give a shit.
Credit spreads (red) are widening again. Correlation to stocks bottom pane:
Flows to junk-focused funds have taken in a net $12.2 billion so far in 2015. Meanwhile, the number of companies downgraded to "junk" grew 26% in the past two years to 184 (versus 290 at Lehman lows). Companies are coming off the list mainly due to bankruptcy (v.s. ratings upgrade).
Moody's (bond) covenant quality index is at the lowest level ever (4.51 out of 5). Moody's warned about this TWO years ago when the index hit 4.17.
High yield debt market defies skeptics
"Companies have taken notice of global investor appetite and have boosted sales of junk debt this year to $80.2bn, up 24 per cent from the same period of 2014, according to Dealogic."
Year-to-date junk bond issuance:
Year-to-date junk bond issuance:
Negative Skew
S&P 500, Oil ETFs, IPOs, Spanish Ponzi bonds, Chinese ghost cities, Vancouver crack shacks, London penthouses, San Francisco sheds, and Junk bonds.
San Francisco shed sells for $1.2 million:
Does the plywood covering the door come with the shed, or is that extra?
S&P 500, Oil ETFs, IPOs, Spanish Ponzi bonds, Chinese ghost cities, Vancouver crack shacks, London penthouses, San Francisco sheds, and Junk bonds.
San Francisco shed sells for $1.2 million:
Does the plywood covering the door come with the shed, or is that extra?
