Gundlach: Debt-Financed Share Buybacks Turned Stock Market Into High-Risk CDO
Please consider Gundlach's Slideshow on Debt Financed Buybacks.
Corporate Credit as Percentage of GDP
Investment Grade Has Shorter Maturity Than High Yield
US Corporate BBB Debt
BBB debt is one step above junk.
Rise of the Zombie
In the US, 15% of the companies in the S&P 500 are Zombie Corporations.
Zombie firms are those that are unable to cover debt servicing costs from current profits over an extended period.
If they cannot refinance, they go under.
Junk Rated Bonds
On December 28, I noted Suddenly There's No Appetite for Bond Deals as Spreads Widen.
Never before have there been so many bonds this close to junk.
Bond Market Breakdown (August 2018)
- AAA $0.11 Trillion
- AA $0.59 Trillion
- A $2.60 Trillion
- BBB $3.15 Trillion
- BB $0.57 Trillion
- B $0.52 Trillion
- C $0.16 Trillion
Fed on Hold
The Powell Fed is now on hold. It cannot possibly matter one bit. It's simply Too Late to Matter.
Mike "Mish" Shedlock