If we're on the brink of a deepening default cycle, U.S. corporate debt hasn't gotten the message. Investors are demanding the least extra yield over rates to own the lowest-rated junk bonds since February, before the pandemic really took hold. pic.twitter.com/KQNWLW6NPm
— Lisa Abramowicz (@lisaabramowicz1) October 21, 2020
No deflation with rising permanent joblessness spells STAGFLATION. Just sayin… t.co/q71USOug43
— Danielle DiMartino Booth (@DiMartinoBooth) October 21, 2020
The Fed Did a Lot of Talking Yesterday about a Big Bank Failure: Should We Worry?
Turns out the federal government’s plan for dealing with a mega bank failure on Wall Street is no better conceived than the federal government’s plan for dealing with the worst pandemic since 1918.
Junk Bonds Won’t Save Everybody From Going Bust
investors need to remember that speculative-grade companies aren’t immune from going bust, no matter how wide open the debt markets might be. Junk-rated bonds, backed by a business that can’t make it through the pandemic, are just junk.