corporate bonds

It’s Not A Stock Bubble But A Bigger Corporate Bubble

By |2015-03-03T17:46:15-05:00March 3rd, 2015|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

With liquidity running somewhat perilously noncommittal since June, you would think the riskiest parts of the credit market would be most affected. That is incorrect and once again stands out as to the bubbly nature of the current age. Aside from liquidity draining enthusiasm into and around October 15 and December 1, high yield debt has not only repriced itself [...]

Shifting Foundation of Junk

By |2015-01-26T17:28:02-05:00January 26th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The energy sector may account for a good proportion of risky credit, but that doesn’t necessarily mean that all negative price action in high yield and junk is entirely energy. While certain markets have regained comfort with the world’s various potentials, the outer echelons of US credit remain on alert. That is typically the pattern of an impending inflection in [...]

Woe the ‘Dollar’

By |2014-12-17T16:35:25-05:00December 17th, 2014|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

It seems Charles Dickens had a flair for 21st century economics all the way back in the 19th century. Writing in his book Little Dorrit (thanks to W Krauss for the reminder) he observed that credit systems tended to be, “…a person who can’t pay, gets another person who can’t pay, to guarantee that he can pay.” The first person [...]

Corporate Evidence For Liquidity Regime Change

By |2014-11-21T17:50:57-05:00November 21st, 2014|Bonds, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Adding to the repo observations from this morning regarding illiquidity and more importantly gathering risk aversion, the behavior of corporate bonds and spreads matches that overall sketch very closely. The key point is how different the corporate bond space, like the UST curve, has behaved in 2014 in relation to 2013. In past periods just prior to recessions, you see [...]

More Than $2 Trillion In Corporate Bonds ‘Disappear’

By |2014-11-12T18:29:56-05:00November 12th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

I have not yet commented on the huge revisions in corporate debt to this point (the revisions were released on September 18 with the regular update to the Z1 Financial Accounts of the United States, formerly Flow of Funds) because there was so very little information surrounding the changes. I had hoped by now somebody somewhere with a better perspective [...]

Liquidity Discrepancies Are Not A Particularly Welcome Signal

By |2014-10-17T11:33:22-04:00October 17th, 2014|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

My colleague Joe Calhoun noted that the Wall Street Journal has documented further anecdotes about the credit market illiquidity this week. Corporate-bond investors have struggled this week to find trading partners for some large orders, causing unusual price drops and raising concerns that trading could freeze in future market turmoil. “Buyers just disappeared” early Thursday for many low-grade bonds and [...]

No Doubt About Tightening

By |2014-02-12T16:52:29-05:00February 12th, 2014|Bonds, Federal Reserve/Monetary Policy, Markets|

Chairman Bernanke handed off to Chairman Yellen a tapering asset purchase rate, and thus more than a theoretical problem. It is theoretical to the FOMC, but very much real out here where the world actually operates. The QE program instituted in September 2012 with MBS additions to the SOMA balance sheet has created a number of distortions in various pockets [...]

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