Ok, so we’re a broken record on HY and especially HY energy.
And, you’ll recall, we were quick to call HY Energy trading inside of HY as a whole a “full retard” moment given the fundamentals that currently prevail in the oil market.
As it turned out, we were right. At least in the short-term. Crude crashed, HY spreads widened, and HY credit as an asset class saw the largest outflows in three years.
Still, there are some readers (whose commentary will for the time being remain in Heisenberg’s inbox, but who may well find themselves the subject of the next installment of Heisenberg Hate Mail Bag) who don’t seem to understand why it’s a problem that spreads are as tight as they are when oil is trading at less than half of where it did the last time HY spreads were where they are now and when the fundamentals for crude are overtly bearish.
Those folks won’t understand why the following charts are absurd, but hopefully someone will. As usual, we’re in the business of making you think, not thinking for you (because trust us, that’s bad), so we’ll present these without further comment…
(BofAML)
