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Reddit traders are helping to inflate a bond bubble: Ark's Cathie Wood
This I find harder to believe because the bond market is a large institutional one. It seems like an easy target to blame Reddit. I also suspect "Reddit traders" aren't all really Reddit traders. How easy would it be for any institutional money manager to create a Reddit account and pump and dump any security? Some of the trades during the GameStop runup exceeded 10,000 shares. That's no mom and pop "Reddit trader."
While some deep value and/or companies with too much debt may be impacted by some form of Reddit inspired trading; unless the bond market place becomes overwhelmed by bond slayers, I'm not concerned about potential impact; with the exception of pockets of disruption in some single issues that are junk or borderline corporate junk. I'm not saying these companies do not exist, they surely do. A Reddit traders big test would be to go after Ford or a similar company with a lot of debt, to discover their power OR not.
Estimated global bond value as of August, 2020 is $128.3 Trillion.
Her argument is that by pushing up the stock prices of dicey companies it makes it cheaper for them to access capital, and that affects the bond market's pricing. It seems rather tangential and too much of a reach, given just a handful of companies involved and the immensity of the bond market.
Comments
While some deep value and/or companies with too much debt may be impacted by some form of Reddit inspired trading; unless the bond market place becomes overwhelmed by bond slayers, I'm not concerned about potential impact; with the exception of pockets of disruption in some single issues that are junk or borderline corporate junk. I'm not saying these companies do not exist, they surely do. A Reddit traders big test would be to go after Ford or a similar company with a lot of debt, to discover their power OR not.
Estimated global bond value as of August, 2020 is $128.3 Trillion.
My 2 cents worth.
Catch
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