Should fund managers hedge against another crash? The black swan debate is on… t.co/uFMljU2Dxp via @markets
— Sam Potter (@SamJPotter) May 6, 2020
The biggest shock in modern market history made black swan insurance the hottest trade of the year. It was only a matter of time before the naysayers showed up.
As stock turmoil recedes and fund managers the world over contemplate hedging against the next big crash, options-based defensive strategies have been dominating the headlines for making a killing in the sell-off.
The corporate debt crisis, caused by too much debt, led to the Fed stepping in so that corporations can issue $600 billion more debt since March. 👍🏻
— GreekFire23 (@GreekFire23) May 6, 2020
THE ANGELS ARE FALLING
23 U.S. companies have been cut to junk in 2020 >3x 2019’s first 6 months. Meanwhile GM, Marriott, Hyatt, Expedia, Nordstrom & Kohl’s are clinging to lowest rung of investment grade w/at least one negative outlook/downgrade review pending
@markets pic.twitter.com/lhhNqlJdL9
— Danielle DiMartino Booth (@DiMartinoBooth) May 6, 2020
Consumers will cut back on non essential spending and since our economy is 70% the consumer, spending will get worse by the end of summer.
The Fed pumping doesn’t help the everyday consumer giving another round of and bigger stimulus checks would.— Will Meade (@realwillmeade) May 6, 2020
twitter.com/hks55/status/1258082206599327746
This market has an appointment with sanity.
— Sven Henrich (@NorthmanTrader) May 6, 2020
This is how fucked up everything is. The fed is loaning money to hedge funds at 0% through the repo market. Those funds are using that money to buy up high yield debt so they can sell it back to the fed at higher prices when fed starts the etf buying program. Shit is so fucked up
— hks55 (@hks55) May 6, 2020
Trust me, this is a lot worse than 2008 in economic activity and cash-flow-depression terms: t.co/eBzGcR5pHk via @markets
— Darius Dale (@HedgeyeDDale) May 6, 2020
Important chart. Lots of concentration in the "Big 5" mega cap stocks. t.co/jUiqC97gSy
— Lyn Alden (@LynAldenContact) May 6, 2020