“Evidently, bonds got tired of being called boring and decided to grab some headlines."
Governments have traditionally argued that as long as debt remains manageable and serviceable without difficulty, there’s little cause for concern. While this notion holds some truth, the reality is that recent growth has largely been fueled by an insurmountable increase in debt.
We are now 18 months into the Fed’s tightening cycle and many market participants, including us, have been surprised by the resilience of credit spreads, particularly in the high yield (HY) market where the option-adjusted spread for the Global HY index has dipped to the low 400s (bps), one of the tightest levels of post Global Financial Crisis observations.
Louis Jouvet: "Tu ne me demandes pas ce que contient cette lettre ?"
Pupil: "Que contient cette lettre ?"
Louis Jouvet: "Dix fautes d’orthographe, quatre fautes de syntaxe, et une protestation !"
"You have a very pretty nice dress.
Björk: Oh, thank you.
Is this the correct order you wear it?
Björk: I hope not."
I feel like my old self again. Totally inadequate, completely insecure, paranoid, neurotic. It’s a pleasure!