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STRATEGIC INVESTMENT INSIGHTS (SII)

INSIGHTS

Limited Time Public View!

This page is a duplicate of the Bonds & Credit SII page for subscribers. It is currently one of our many SII’s and is provided as an example of what you can expect to see as a subscriber.   At the bottom of the page you will find a ‘Watch List’ of instruments we are currently monitoring, one of them is clickable and leads to that specific securities SII page where you will find more information and a link to a live chart.  

BONDS & CREDIT

SITUATIONAL BIAS:
  ENDING DEBT SUPER CYCLE: NEGATIVE
  “MINSKY” MELT-UP: POSITIVE

INVESTMENT THESIS & STRATEGY

“Corporate debt and their equity will face the biggest pain when the next downturn comes — Corporates are more levered than they were pre-crisis”

Infamous Greg Lippmann of “The Big Short” 

THE CORPORATE DEBT LEVELS OF “ZOMBIE” CORPORATIONS AS WELL AS SELECT SOVEREIGN & EMERGING MARKET DEBT MAKE THEIR BONDS POTENTIAL MAJOR 2018-2019 ‘SHORT’ OPPORTUNITIES.

The next big financial downturn is likely to start in corporate debt. Easy-money monetary policies have allowed firms to load up on borrowings, with around 37 percent of companies being classed as highly leveraged in 2017 compared with 32 percent in 2007 prior to the last financial crisis.

PRESENT MATASII FOCUS IS TWO FOLD

1- HY CORPORATE JUNK BONDS – Is Setting Up for a Major Decline As Credit Markets Tighten (See “Road Map to Repricing of Risk” & Guide To Selecting Junk Bonds)

2- 10Y UST NOTE – A Yield Rise From 1.34% tp 3.15% is a Major Capital Appreciation Gain For Bonds

MARKET MESSAGES (Click to Enlarge)
SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS.. EVER -- NOR ARE SPECULATORS SELDOM RIGHT??
SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS.. EVER — NOR ARE SPECULATORS SELDOM RIGHT??
GOVERNMENT IS PRESENTLY SELLING SHORT TERM DEBT - IS IT PLANNING OR EXPECTING LONGER TERM DEBT TO SOON HEAD LOWER ON YIELD AND HIGHER ON PRICE?
GOVERNMENT IS PRESENTLY SELLING SHORT TERM DEBT – IS IT PLANNING OR EXPECTING LONGER TERM DEBT TO SOON HEAD LOWER ON YIELD AND HIGHER ON PRICE?
THE GROWING SIZE OF THE US DEBT IS A PROBLEM BUT THE "ROLLOVER" AT HIGHER RATES IS A MAJOR LOOMING PROBLEM
MEANWHILE THE EU CUTTING CSPP
THE GROWING SIZE OF THE US DEBT IS A PROBLEM BUT THE “ROLLOVER” AT HIGHER RATES IS A MAJOR LOOMING PROBLEM MEANWHILE THE EU CUTTING CSPP & PSCC WILL FURTHER SIGNIFICANTLY AGGRAVATE THE PROBLEM
MAJOR PROBLEMS LOOMING GLOBALLY IN PRIVATE CORPORATE DEBT (Click To Enlarge)
GLOBAL CORPORATE DEBT IS BECOMING UNSUSTAINABLE
GLOBAL CORPORATE DEBT IS BECOMING UNSUSTAINABLE
GLOBAL CORPORATIONS WILL BRING NEXT WAVE OF PAIN BEGINNING IN 2019 - BONDS WILL BEGIN FAILING EARLIER
GLOBAL CORPORATIONS WILL BRING NEXT WAVE OF PAIN BEGINNING IN 2019 – BONDS WILL BEGIN FAILING EARLIER
DRIVEN BY SUSTAINED EASY CREDIT GLOBALLY
DRIVEN BY SUSTAINED EASY CREDIT GLOBALLY
HIGH YIELD BONDS ARE HIGHLY OVER-LEVERAGED AND EXPOSED TO RISING RATES OR A SLOWING ECONOMY
HIGH YIELD BONDS ARE HIGHLY OVER-LEVERAGED AND EXPOSED TO RISING RATES OR A SLOWING ECONOMY
FALLING FREE CASH FLOWS ARE ALREADY PROBLEMATIC
FALLING FREE CASH FLOWS ARE ALREADY PROBLEMATIC
10-20% OF ALL PUBLIC CORPORATIONS ARE NOW CLASSIFIED AS "ZOMBIE'S" OR "CHALLENGED".
10-20% OF ALL PUBLIC CORPORATIONS ARE NOW CLASSIFIED AS “ZOMBIE’S” OR “CHALLENGED”.
ECB'S CSPP PROGRAM IS PRESENTLY KEEPING 6-9% OF EUROPEAN STOXX CORPORATIONS ALIVE
ECB’S CSPP PROGRAM IS PRESENTLY KEEPING 6-9% OF EUROPEAN STOXX CORPORATIONS ALIVE
15% OF THE S
15% OF THE S&P 500 CORPORATIONS ARE NOW “ZOMBIE’S”

MARKET RESEARCH

  • 09-21-18-SII-BONDS & CREDIT-Yield Curve - UST 2s30s Spread-1

    THE FED MAY BE FORCED TO OVER-TIGHTEN DUE TO AN END OF CYCLE “TIGHTENING TANTRUM”

    THE FED MAY BE FORCED TO OVER-TIGHTEN DUE TO AN END OF CYCLE “TIGHTENING TANTRUM” RED ANNOTATIONS BY MATASII.com – Chart Courtesy of ZeroHedge.com A Continuation Pattern Suggesting an Inverted Yield Curve in Q2 2019 — SOURCE: 09-19-18 – “Why The Long-End Is Coming Unglued” — With 30Y yields blowing out, the long end is “coming […]

  • 09-19-18-SII-B&C--Investors to be Focued on Dot Plot for Sept 27th FOMC Meeting-1

    INVESTORS TO BE FOCUSED ON THIS “DOT” DURING THE SEPTEMBER 26th FOMC ANNOUNCEMENT

    INVESTORS TO BE FOCUSED ON THIS “DOT” DURING THE SEPTEMBER 26th FOMC ANNOUNCEMENT — SOURCE: 09-19-18 – “All Eyes Will Be On This Dot During Next Week’s FOMC Meeting” — With a 25bps rate hike during next Wednesday’s FOMC meeting virtually assured, trader attentions will be focused on something else entirely: the median 2019 dot, […]

  • 09-18-18-SII-B&C--The Recession Started the Last Time Bonds Were This Attractive versus Stocks-1

    THE RECESSION STARTED THE LAST TIME BONDS WERE THIS ATTRACTIVE VERSUS STOCKS

    THE RECESSION STARTED THE LAST TIME BONDS WERE THIS ATTRACTIVE VERSUS STOCKS — SOURCE: 09-18-18 – “The Last Time Bonds Were This Attractive Vs Stocks, The Recession Started” — The long-end of the Treasury yield curve is blowing out today: whether due to technicals, now that the 3% level has been breached, or amid expectations […]

  • 09-12-18-SII-B&C-Lacy Hunt-Q2 Report-US Treasury Long Bond-1

    LACY HUNT ON THE US TREASURY LONG BOND

    LACY HUNT ON THE US TREASURY LONG BOND Expectations and Disappointments Coming out of 2017, expectations were widespread that a synchronized global expansion lay ahead for 2018. Forward momentum was thought to prevail in Europe, Japan and the emerging markets. A doubling of the growth rate in public and private debt in 2017 over the […]

  • 09-12-18-SII-BONDS & CREDIT-Trump Tax Cuts Are Why US Bonds Yields Not Higher-1

    BLOOMBERG: TRUMP TAX CUTS ARE WHY US BOND YIELDS AREN’T HIGHER

    BLOOMBERG: TRUMP TAX CUTS ARE WHY US BOND YIELDS AREN’T HIGHER The government’s fiscal policies amount to robbing Peter to pay Paul. — SOURCE: A. Gary Shilling, Bloomberg – “Tax Cuts Are Why U.S. Bond Yields Aren’t Higher” — The yield on the 10-year U.S. Treasury note yield has risen 49 basis points since the beginning […]

  • 08-28-18-SII BONDS & CREDIT-Fed Funds Futures Don't Believe What the Fed is currently Spinning-1

    FED FUND FUTURES DON’T BELIEVE WHAT THE FED IS CURRENTLY “SPINNING”

    FED FUND FUTURES DON’T BELIEVE WHAT THE FED IS CURRENTLY “SPINNING” The Fed Funds target rate according to the FOMC members’ median ‘Dot Plot” is UP. The Fed Funds Futures market says down! The markets don’t believe what the Fed is currently “spinning”!

  • 08-07-18-SII-BONDS & CREDIT--Short Interest In Global Junk Bond ETF Just Hit All Time High-1

    SHORT INTEREST IN GLOBAL JUNK BOND ETF’S JUST HIT AN ALL TIME HIGH

    SHORT INTEREST IN GLOBAL JUNK BOND ETF’S JUST HIT AN ALL TIME HIGH

  • 08-06-18-SII-B&C-Jamie Dimon Warns of 5% 10Y UST-1

    JP MORGAN CEO JAMIE DIMON WARNS OF 5% TREASURY YIELDS

    JP MORGAN CEO JAMIE DIMON WARNS OF 5% TREASURY YIELDS  JPMorgan CEO sees potential for 10-year yield to reach 5 %  Says c–rrent bull market could run for 2 or 3 more years — SOURCE: 08-06-18 Bloomberg – “Jamie Dimon Warns of 5% Treasury Yields” — Noting content with a previous warning that investors should brace for […]

WATCH LIST

Limited Time Public View! (cont.)

Here is the Watch List of securities for the Bonds & Credit SII.  While we are currently only watching 4 at the moment for Bonds & Credit, other SII Watch Lists contain 25+.   The symbol for TNX links to its SII page where you can find more information and a live chart link.  Remaining symbols are similarly linked for subscribers.

MORE on Watch Lists

Note potential technical trigger levels for Long and Short are given: these are taken directly from the chart and can be found in our IDEAS. When the market reaches either of the levels, the Current Price will light up, alerting that possible action is near.