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Tag Archives: corporate bonds
The Zombie Companies Are Coming
The Zombie Companies Are Coming Easy money is a curse for capitalism. Through the first half of August – which is normally a quiet period for the bond market in the US – a total of $56 billion in junk bonds and leveraged loans were issued by junk-rated companies, according to S&P Global. That was […]
Wait, why is The Fed buying my biggest competitors’ bonds?
Wait, why is The Fed buying my biggest competitors’ bonds? On Cantillionaires, Sycophants and Losers “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” — Henry Ford “The ultimate crisis will occur when […]
Bank of Canada Announces Provincial, Corporate QE
Bank of Canada Announces Provincial, Corporate QE While the Bank of Canada kept its overnight rate at 0.25% as expected – as the alternative after three consecutive rate cuts would have been to cut below its effective lower bound of 0.25% and go NIRP – the central bank – which announced that the outlook is […]
The Angels Are Freefalling: Q1 Saw Record Downgrades To Junk And The Real Pain Is Coming
The Angels Are Freefalling: Q1 Saw Record Downgrades To Junk And The Real Pain Is Coming Back in November of 2017, this website was the first to suggest that a flood of “fallen angels”, or the lowest, BBB-rated investment grade bonds that are downgraded to junk, will be the event that triggers the next corporate debt […]
In Unprecedented Move, Fed Unveils Open-Ended QE Including Corporate Bonds
In Unprecedented Move, Fed Unveils Open-Ended QE Including Corporate Bonds Coming into Monday, the Fed had a problem: it had already used up half of its entire emergency $700BN QE5 announced last weekend. Which, together with the plunge in stocks, is why at 8am on Monday, just as we expected – given the political cover they have […]
Weekly Commentary: $150 Billion Global Corporate Bond Binge
Weekly Commentary: $150 Billion Global Corporate Bond Binge After an extraordinary August, markets are showing no inclination for stability to begin September. Jumping 1.3% Thursday on news of an October restart of trade talks, the S&P500 gained 1.8% for the week. The S&P500 ended the week less than 2% from all-time highs. The Semiconductors surged […]
“That’s a Super Dangerous Place to Be”: CEO of JPMorgan Asset Management
“That’s a Super Dangerous Place to Be”: CEO of JPMorgan Asset Management When central banks distort the markets, risk disappears from view. “You could have a bunch of walking-zombie companies and you don’t even know it,” explained Mary Callahan Erdoes, CEO of JPMorgan Asset Management, on Wednesday at the Delivering Alpha Conference in New York. […]
China Deleveraging Hits Corporate Bonds As Cascade Effect Begins
China Deleveraging Hits Corporate Bonds As Cascade Effect Begins Following the market lockdown during October’s Party Congress, many commentators were disturbed by the continued rise in Chinese government bond yields as we returned to “business as usual”, with the 10-year rising to 4%. At the beginning of this month, we discussed the sell-off (see “China: […]
David Stockman: Thanks for the Corporate Bond Bubble, Fed
DAVID STOCKMAN: THANKS FOR THE CORPORATE BOND BUBBLE, FED Once upon a time businesses borrowed long term money—-if they borrowed at all—-in order to fund plant, equipment and other long-lived productive assets. That kind of debt was self-liquidating in the sense that it usually generated a stream of income and cash flow that was sufficient to […]
Dollar-Denominated Corporate Time Bomb Set to Blow
Dollar-Denominated Corporate Time Bomb Set to Blow Emerging economies around the world are already feeling the first pangs of withdrawal as fast yield-chasing investors send their funds back to the U.S. in anticipation of higher Treasury yields and a further appreciating dollar. In Mexico, the central bank has just published its balance of payments data […]
This is When Bonds Go Kaboom!
This is When Bonds Go Kaboom! The toxic miasma of “distressed debt.” It’s getting tougher out there for our QE and ZIRP-coddled corporate junk-bond heroes. Unisys, whose revenues and profits decline year after year and whose stock dropped from over $400 a share during the prior tech bubble to $13 a share now, withdrew its […]
The Lesson In China: Don’t Go Bubble In the First Place
The Lesson In China: Don’t Go Bubble In the First Place There can be no mistaking that Chinese stocks are in a bubble. Since November 21, the Shanghai SSE Composite index has risen more than 100%. Going back to July 22, the gain is nearly 145%. Those dates are not random coincidence, as they mark […]
Central Banks Warn: Liquidity May Evaporate When Investors Finally Remove Blindfolds
Central Banks Warn: Liquidity May Evaporate When Investors Finally Remove Blindfolds Companies are selling bonds like madmen. This year through Tuesday, investment-grade and junk-rated companies have sold $438 billion in new bonds, up 14% from the prior record for this time of the year, set in 2013, according to Dealogic. This quarter is already in […]
Thanks For The Corporate Bond Bubble, Fed
Thanks For The Corporate Bond Bubble, Fed Once upon a time businesses borrowed long term money—-if they borrowed at all—-in order to fund plant, equipment and other long-lived productive assets. That kind of debt was self-liquidating in the sense that it usually generated a stream of income and cash flow that was sufficient to service and […]
