Meanwhile, More Milestones In Junk
Since April, one of the most astounding dynamics to observe was the dramatic abatement of credit risk or, perhaps more aptly, the market's pricing of credit risk.
The Fed's unprecedented backstop for investment grade corporate bonds and controversial decisions to buy fallen angels and high yield ETFs, together served as a Linus-style security blanket -- a psychological support pillar of incalculable value to a market staring down a public health crisis that posed an existential threat to entire
When does the market lose confidence in the volatility suppressing power of the Fed put. “Don’t fight the Fed” has gone parabolic in this cycle. This is a kind of bubble in narrative thinking that once it blows up one can only imagine the chaos. However, betting against it appears to be a road to the poor house. Yet, owning optionality on Fed Fail seems sensible.