This is way beyond my pay grade. I’m linking it because in following the electronic and print media it’s the one warning shot I keep hearing repeated - a dozen or more times from different reputable sources over the past month. Take it for what it’s worth.
My concern isn’t so much with the
cause of the next crisis as with the overall carnage on many risk assets it might inflict. I’ll say that some things haven’t
computed (for me anyway) this year. 8+% losses in some Treasury bond funds while blue chip stocks have climbed as much or more over the same period. Not that they’ve diverged - but that the degree and speed of divergence seem unsustainable.
https://www.institutionalinvestor.com/article/b1bv1tbv362ykv/Paul-Tudor-Jones-Corporate-Credit-Will-Cause-the-Next-Crisis
Comments
I read Mr. Jones, over the years.
As to bonds in general.........I always pay attention.
These are the MONEY underbelly of much of the rest of the markets.
Same, in aspect; as those who run an ongoing balance on a credit card.
Should be avoided, but isn't........same goes for over borrowing when rates are low.
Great company plan if the borrowing is for proper reasons, and hell to pay if things don't work out, eh?
I glance at CDS rates (insurance cost against bond defaults). In particular, I attempt to let knowledgeable folks discover a trend with this area and then pay more attention.
If things move towards crappy with CDS rates, well; perhaps there is smoke before the fire starts.
Just my humble opinion of "something" of consequence.
Good evening,
Catch
Maybe these big-shot highly compensated managers have swallowed “stupid pills” and lost their way? Or, maybe the various markets are behaving irrationally - making traditional hedge fund approaches ineffective? We’ll probably know the answer a year from now.
Regards,
Ted
https://www.mutualfundobserver.com/discuss/discussion/45389/paul-tudor-jones-corporate-credit-will-cause-the-next-crisis#latest