US investment grade debt is on track for worst year since 2008.

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via confoundedinterest:

Last decade, there was a residential mortgage credit bubble that burst. While there doesn’t appear to be a residential mortgage credit bubble (well, just a little), there is most definitely a corporate debt credit bubble that appears to be bursting.

Take General Electric. Their stock price has slipped to under $10 per share  from over $30 per share back in early 2017 while the 5% perptual bond has rapidly gone from around par ($100) to $79 in the wink of The Fed’s eye.

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Of course, GE’s earnings-per-share have been tanking as interest rates have been rising.

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And to make matters worse, US investment grade debt is on track for worst year since 2008.

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Like Robot Monster, the Federal Reserve has helped to create bubbles in the corporate bond market.

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