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

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.

geperp.png

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

geearn.png

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

corpbondpain.png

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

fedbubble machine

395 views