Warning Signs Similar To Bear Stearns In 2007? Bond Spreads Narrow To Lowest Since 2007

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The gap or spread between high yield debt (junk bonds) and investment grade corporate bonds is now the most narrow it has been since 2007.

And what happened in 2007?

A number of hedge funds owned by former famous investment bank, Bear Stearns, started failing thanks to too many bad (over leveraged) bets on subprime housing and mortgage backed securities.

 

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