The Fed’s “temporary” liquidity injections have become permanent. Balance sheet now $4.15 trillion. In three months balance sheet could be back to peak level. And injections are unlikely to stop, as sovereign yields would rise. pic.twitter.com/P5Nq2WuuCv
— Daniel Lacalle (@dlacalle_IA) January 25, 2020
I just rewatched The Big Short. Great film but it made me pause to think about BBB bonds with spreads at all time lows and the ISM at 47. What would be the best way to play that the future downgrade rate of BBB is wrong? I think they trip into CCC, which a cant absorb it.
— Raoul Pal (@RaoulGMI) January 26, 2020
There were 44 downgrades in the European #leveragedloan market last year, the most since 2013 (though the downgrade/upgrade ratio actually dropped from a record 9.3x in 2018). pic.twitter.com/XbXm0GkYWz
— Leveraged Loans (@lcdnews) January 25, 2020