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‘Apocalypse Postponed’
If you're looking for "signs of greed," BofA's Michael Hartnett sees one.
He probably sees more than that, but he highlighted one in particular in the latest installment of his popular weekly "Flow Show" series, which this week struck a cautious tone on an increasingly cavalier market mood.
The spread between BBB credit and T-bills is now just 60bps, he said, the lowest in 40 years.
In fact, if you leverage series from Global Financial Data to construct a longer-term chart, the current spre
i had not seen / heard that BBB / T-bill spread point … s&^t, that is just crazy, right? There’s absolutely more than 60 bps of risk in BBBs (unless the economy is golden goldilocks)… So, either BBBs rates increase or T-bills decrease (at sometime in distant future when rationality revisits) – i’m holding my bills 🙂
Dollar interest on my bank accounts has jumped 300% in the last 8 months. I can buy 3-yr FDIC CDs paying 4.95% all over town, even in small banks. Vs 18 months ago, that’s nuts.
Well this should scare the hell out of everyone.
I really like charts that have extremely long look-backs like the BofA chart at the top. Financial market events are typically so spread out that you wind up with a n=1 sample size if you’re not looking at decades.