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STRATEGIC INVESTMENT INSIGHTS (SII)

INSIGHTS

SHORT TERM
(Next 2 Quarters)

INTERMEDIATE TERM
(Next Year)

LONG TERM
(>1 Year)

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

“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

  • 07-18-18-SII-B&C--ECB Bond Buying Creates Zombie Corporations-1

    POSSIBLE SUCCESSOR TO JPM’S DIMON WARNS: “ECB BOND BUYING CREATES ZOMBIE CORPORATIONS”

    POSSIBLE SUCCESSOR TO JPM’S DIMON WARNS: “ECB BOND BUYING CREATES ZOMBIE CORPORATIONS” — SOURCE: 07-18-18 Bloomberg – “ECB Bond-Buying Creates Zombie Companies, Possible Successor to Dimon Warns” — Mary Callahan Erdoes  Photographer: Simon Dawson/Bloomberg The European Central Bank’s bond-buying program has created a “dangerous” environment for investors by masking risks in the market for corporate […]

  • 07-17-18-SII-B&C--5 Pillars of Debt Default-1

    THE FIVE PILLARS OF DEBT DEFAULT STARTS WITH GLOBAL CORPORATIONS’ FOREIGN DENOMINATED DEBT

    THE FIVE PILLARS OF DEBT DEFAULT STARTS WITH GLOBAL CORPORATIONS’ FOREIGN DENOMINATED DEBT –SOURCE: 07-16-18 Gold, Goats & Guns, Tom Luongo – “The Five Pillars Of The Looming Debt Default” — Regular readers of Gold Goats ‘n Guns know that I’ve been handicapping a major sovereign debt default to begin here in 2018 or early 2019.  But, what […]

  • 07-16-18-SII-B&C-HY ETF Shorts Hit All Time High-1

    HY ETF SHORTS HIT ALL TIME HIGH – IS A JUNK BOND CRASH IMMINENT?

    HY ETF SHORTS HIT ALL TIME HIGH – IS A JUNK BOND CRASH IMMINENT? — SOURCE: 07-15-18 “Junk Bond Crash Imminent? HY ETF Shorts Hit All Time High” — It has been a tough year for junk bond funds, if not for junk bond spreads, which as we noted recently have shown impressive resilience and have solidly […]

  • 07-13-18-SII-B&C--Corporate Debt the Catalyst for the Next Financial Perfect Storm-1

    RESTRUCTURING LEGEND WARNS OF CORPORATE DEBT BEING THE CATALYST FOR THE NEXT FINANCIAL “PERFECT STORM”

    RESTRUCTURING LEGEND WARNS OF CORPORATE DEBT BEING THE CATALYST FOR THE NEXT FINANCIAL “PERFECT STORM” — SOURCE: 07-12-18 ZeroHedge – “”This Is A Very Scary Scenario”: Restructuring Legend Warns Of Coming “Perfect Storm” — Two months-ago, we brought to your several very concerning quotes from some of the nation’s top restructuring bankers, of which the most […]

  • 07-13-18-SII-B&C--Carpet About tobe Pulled From Under Junk Bond Market-1

    WHY THE CARPET IS ABOUT TO BE PULLED FROM UNDER THE JUNK BOND MARKET

    WHY THE CARPET IS ABOUT TO BE PULLED FROM UNDER THE JUNK BOND MARKET — SOURCE: 07-03-18 ZeroHedge – “Why The Carpet Is About To Be Pulled From Under The Junk Bond Market” — Last week we noted that ever since the start of 2018, an odd divergence has emerged in credit markets, where Investment Grade bonds […]

  • 07-12-18-SII-B&C--Bonds Minus Duration-1

    BONDS MINUS DURATION: A TRAIN WRECK IN THE MAKING?

    BONDS MINUS DURATION: A TRAIN WRECK IN THE MAKING? — SOURCE: 07-11-18 Alliance Bernstein, Gershon Distenfeld – “Bonds Minus Duration: A Train Wreck In The Making?”– A bond allocation is like a railroad. Credit is the locomotive that generates high returns, duration the track that keeps the train in line. Take the track away and you […]

  • 07-12-18-SII-B&C--Corporate Bond Market Is Getting Junkier-1

    DIMARTINO BOOTH: CORPORATE BOND MARKET IS GETTING JUNKIER!

    DIMARTINO BOOTH: CORPORATE BOND MARKET IS GETTING JUNKIER! — SOURCE: 07-11-18 Bloomberg – “The Corporate Bond Market Is Getting Junkier” — Authored by Danielle DiMartino Booth via Bloomberg, Few investors realize the ticking time bombs populating what they believe are the safest parts of their portfolios. Much has been made of the degradation of the $7.5 trillion U.S. corporate […]

  • 07-11-18-SII-B&C--Yield Curve Inverts After December FOMC Meeting-1

    YIELD CURVE INVERTS AFTER THE DECEMBER FOMC MEETING – US RECESSION 18 MONTHS LATER

    YIELD CURVE INVERTS AFTER THE DECEMBER FOMC MEETING – US RECESSION 18 MONTHS LATER It is different this time. Asset prices are a signal, such a pity that sometimes this information cannot be discerned until after the fact.  What is truly different this time is that past inversions have rotated around a ~5%-rate while this […]

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.