Monday, 14 December 2015

Depends......................from Rico

Not since the Hungarian Countess Elizabeth Bathory has there been a bloodbath like the one taking place in "Junk Bonds" right now.
- The attached "heat map" shows the YTD status of junk bonds since 01 Jan '15.
 
There are a few still in the green for the year, but not many.
- For the FED and FTV: red is bad, and the redder the badder.
 
Several funds (Stone Lion and Third Ave) have already 'gated' their investors [read: you cannot get your money out]. 
- I'd bet there will be more to follow.
 
NOT SHOWN are the massive pile of derivatives that are connected to, and depend upon, this 'debt without collateral.' Junk bonds are only a couple trillion dollar market - the proverbial tip of the iceberg showing above the water, but it's the derivatives [read: bets] that are truly huge and unseen under the water....forgive the pun.
- When that house of cards collapses, 'depends' won't be enough to contain the damage.



1 comment:

Anonymous said...

Hey Rico, thanks for the information. BUT, I'm a nurse, I know how to give shots, medically care for people and give enemas.....but all of this financial stuff is beyond me. Is there any way you could produce a primer on derivatives, bonds and schtuff.
I don't want to sound petulant but damn!!!! I have skills but not the time to do all the research that this topic needs.
Steve