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The widely discussed "everything bubble" is, in reality, a corporate junk bond bubble on steroids sponsored by the Fed.
In the real world, yields would never be negative. In the Central Banks' bubble-blowing world, the Volume of Negative-Yielding Debt Rises Sharply.
After a decade-long buying spree, many companies have pushed their leverage to levels that are typical of junk-rated borrowers in their sectors.
To avoid a downgrade to junk, companies will try to shore up their balance sheet. This means curtailing or stopping share buybacks and slashing dividends.
The "everything bubble" has at its roots central bank policy of yield suppression.
Investor faith in central banks has never been higher.
The Fed is hell bent on producing inflation. The sad part is they do not now how to measure it. Inflation is all around us: In junk bonds, in equities, and in home prices.
...what Powell does now is irrelevant. The bubbles will pop and one rate cut or even four will not make a damn bit of difference. Another very destructive asset bubble deflationary collapse is baked in cake.</>
https://moneymaven.io/mishtalk/economics/junk-bond-bubble-in-pictures-deflation-up-next-YVeMRrVqLEaueKaY2sMLBQ/
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