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This Is How Far Oil Prices Have To Fall To Trigger Junk Bond Chaos
A persistent theme in these pages is the extent to which the mammoth spread compression (i.e. rally)
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The fact that the UBS figure 10 tries to model the data with parabolas makes it clear they are overfitting the data. Unless they really believe that oil rising to $120/barrel will also cause HY spreads to widen. 🙂
Even at these prices the service companies are not able to replace equipment, preventative matinance has been taking a back seat, just doing what has to be done to keep things rolling