Fed QE’s Dramatic Effect On Credit Markets In One Annotated Chart
Global central banks certainly haven’t succeeded in creating the type of robust recovery they ostensibly
Global central banks certainly haven’t succeeded in creating the type of robust recovery they ostensibly
I have absolutely no idea how any of that is sustainable and/or realistic.Â
Right, so the storm wasn’t supposed to come until next month.
Ok, it looks like some folks have seen enough.Â
I found you some yield…
I sincerely hope everyone who’s still plowing money into corporate credit has a good handle on what it is they’re doing because investment grade corporate debt issuance is running at a record pace, and just topped $1 trillion faster than any year in history.
“However, below the surface”…
“…that makes it harder for fund managers to avoid selling securities if volatility jumps from record lows and redemptions increase.”
“Why not just short the actual security that will cause the other security to decline?”
“And you will know my name is the Lord when I lay my vengeance upon thee!”
Ok, so “what hath Trump and Kim wrought” for markets 24 hours on?
Just another day in Wonderland…
I need to know (immediately, if possible), if you are excited about crude. Because some
Will his views prove correct? I don’t know. I just thought they would be nice to share. His thinking requires the ability to imagine the world as a much different place. Is he mad, or genius? You decide. But I will remind you of one thing – “poor people are crazy, the rich are just eccentric.â€
“The S&P 500 and US HY credit have had roughly 9 and 19 times the risk-adjusted returns of US 10-year Treasuries, respectively, during these periods, while commodities have lagged materially.”
“The rise in U.S. tight oil production is close to madness!.”
“Obviously, the sentiment in the market right now is negative and bearish.”
“The Fed’s decision to tighten rates in the face of sluggish growth and limp inflation has encouraged a narrative that they are embarking on a policy error, with the flattening of the yield curve cited as a primary piece of evidence. Upon closer inspection, however, the prognostications of peril appear wide of the mark.”
“The liquidity implications of the amount of cash tied up in ETFs are dimly understood. The amount of passive money is scary. Folks might just want it back sometime.”
“I haven’t seen that much red since I pulled up Fannie Mae’s portfolio in the depths of the great financial crisis. Those are some f’ugly numbers.”
“However today, US equity markets and debt markets are at odds with each other, US equity market investors are avoiding stocks with poor balance sheets, yet high yield bond yields are down at historical lows.”
“The S&P 500 is at near record levels despite the fact that EPS hasn’t really changed in 3 years. So which economy is going to show up later this year and in 2018? We think the jury is still out.”
Ok look, I know we’ve said this over and over. But the evidence just keeps
“Additionally, the number of CCC-rated retail and apparel issuers has tripled over the past six years, with the share of CCC issuers in the Retail sector rising to the highest level since the recession at nearly 14%”…
“Flows across the asset classes we track have slowed down to the lowest level since late 2015.”
[Warning: sarcasm ahead]
“The key takeaway here is that, since mid-2014, the average daily turnover on large capital structures has notably increased relative to smaller capital structures. The increase appears to have coincided with the uptick in the ETF flow volatility.”
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