Why bother buying junk?
High-yield bonds (ex-energy) only yield 180 bps above inflation.
Lowest level in history!
Completely unsustainable and poised to revert.
Most of these businesses can’t even survive in a high cost of capital environment.t.co/RogarSc6hl pic.twitter.com/OAwf8AHvBd
— Otavio (Tavi) Costa (@TaviCosta) December 23, 2019
Uber bullish consensus never ends well.
Implied vol for junk bonds at its lowest level ever.
All previous dips preceded major selloffs in corporate bonds.
Key point:
High yield spreads are at their lowest level since June of 2007 with record corporate leverage today. pic.twitter.com/eKg8ATSs6R
— Otavio (Tavi) Costa (@TaviCosta) December 17, 2019
Definition of insanity.
Junk bond spreads (ex-energy) now at their lowest since June of 2007 at record corporate leverage! pic.twitter.com/VgMDx140wC
— Otavio (Tavi) Costa (@TaviCosta) December 16, 2019