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Thursday, March 28, 2024

Tracking the Amazing Junk Bond Bubbles in the US and Europe

Courtesy of Mish

In response to Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market Bubble, reader AC wants to know how to track it.

Hi Mish,

How can I track/spot Junk bonds yields?

The bubble sounds very close to the top, with bears throwing in the towel, and “new normal” thinking back in vogue.

Thanks,

AC

Bond Yields

Moody’s Baa is its lowest investment grade, one step above junk.

Baa yields are at a record low. The BofA Merril Effective High Yield is near record lows. Euro-denominated junk bond yields are at a record low.

Junk bonds yields are priced as if the Fed and ECB can permanently prevent corporate defaults.

HYG Junk Bond Index

Continue reading here…

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