{"id":3399,"date":"2014-12-22T08:06:34","date_gmt":"2014-12-22T13:06:34","guid":{"rendered":"http:\/\/olduvai.ca\/?p=3399"},"modified":"2014-12-22T08:06:34","modified_gmt":"2014-12-22T13:06:34","slug":"junk-bonds-are-going-to-tell-us-where-the-stock-market-is-heading-in-2015","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=3399","title":{"rendered":"Junk Bonds Are Going To Tell Us Where The Stock Market Is Heading In 2015"},"content":{"rendered":"

Junk Bonds Are Going To Tell Us Where The Stock Market Is Heading In 2015<\/a>.<\/p>\n

Do you want to know if the stock market is going to crash next year?\u00a0 Just keep an eye on junk bonds.\u00a0 Prior to the horrific collapse of stocks in 2008, high yield debt collapsed first.\u00a0 And as you will see below, high yield debt is starting to crash again.\u00a0 The primary reason for this is the price of oil.\u00a0 The energy sector accounts for approximately 15 to 20 percent of the entire junk bond market, and those energy bonds are taking a tremendous beating right now.\u00a0 This panic in energy bonds is infecting the broader high yield debt market, and investors have been pulling money out at a frightening pace.\u00a0 And as I have written\u00a0about previously<\/a>, almost every single time junk bonds decline substantially, stocks end up following suit.\u00a0 So don\u2019t be fooled by the fact that some comforting words from Janet Yellen caused stock prices to jump over the past couple of days.\u00a0 If you really want to know where the stock market is heading in 2015, keep a close eye on the market for high yield debt.<\/p>\n

If you are not familiar with junk bonds, the concept is actually very simple.\u00a0 Corporations that do not have high credit ratings typically have to pay higher interest rates to borrow money.\u00a0 The following is how\u00a0USA Today<\/a>\u00a0describes these bonds\u2026<\/p>\n

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High-yield bonds are long-term IOUs issued by companies with shaky credit ratings. Just like credit card users, companies with poor credit must pay higher interest rates on loans than those with gold-plated credit histories.<\/p>\n<\/blockquote>\n

But in recent years, interest rates on junk bonds have gone down to ridiculously low levels.\u00a0 This is another bubble that was created by Federal Reserve policies, and it is a colossal disaster waiting to happen.\u00a0 And unfortunately, there are already signs that this bubble\u00a0is now beginning to burst<\/a>\u2026<\/p>\n

<\/p>\n

<\/a><\/a>…click on the above link to read the rest of the article…<\/span><\/span><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Junk Bonds Are Going To Tell Us Where The Stock Market Is Heading In 2015. Do you want to know if the stock market is going to crash next year?\u00a0 Just keep an eye on junk bonds.\u00a0 Prior to the horrific collapse of stocks in 2008, high yield debt collapsed first.\u00a0 And as you will […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[236,1932,402,1297,1775],"class_list":["post-3399","post","type-post","status-publish","format-standard","hentry","category-economics","tag-economic-collapse","tag-energy-bonds","tag-high-yield-bonds","tag-junk-bonds","tag-oil-price-collapse"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3399"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3399\/revisions"}],"predecessor-version":[{"id":3400,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/3399\/revisions\/3400"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}