Tag: mortgage

Albert Edwards And Scott Minerd Agree: US Yields Could Go NegativeAlbert Edwards And Scott Minerd Agree: US Yields Could Go Negative

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Do you believe we’ve “crossed the Rubicon” where that means policymakers are increasingly inclined to view the world through the lens of Modern Monetary Theory even if they insist they’re doing no such thing? If the answer is “yes,” you’ll be forgiven. The superfluous middleman notwithstanding, central banks are engaged in debt monetization. That’s been true for a long time, of course. What’s new is that the “match” between government borrowing and central bank bond-buying became so glaring following the pandemic that the charade was difficult to obscure, even in countries where the public isn’t exactly famous for its capacity to grasp nuance (e.g., the US). The figure (below) is about as straightforward as it can be.

https://heisenbergreport.com/2021/03/04/albert-edwards-and-scott-minerd-agree-us-yields-could-go-negative/

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Many Marvels: The Year In Corporate CreditMany Marvels: The Year In Corporate Credit

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One the many marvels of 2020 was the US corporate bond market, where borrowers were able to access cheap money in record amounts despite (or because of, depending on how you want to conceptualize things) the worst economic downturn in a century.

When the lockdowns began in March, credit markets convulsed. Spreads ballooned wider, CDX exhibited multi-standard deviation moves, outflows accelerated, and popular ETFs looked to be on the brink of “breaking,” as big discounts to NAV suggested the underlying liquidity mismatch in retail credit products was finally being exposed as an untenable flaw (figure below).

Ultimately, the Fed stepped in on March 23, and then, just days later, unveiled a backstop for fallen angels and high yield ETFs.


https://heisenbergreport.com/2020/12/31/many-marvels-the-year-in-corporate-credit/arvels-the-year-in-corporate-credit/

Source: https://heisenbergreport.com/2020/12/31/many-marvels-the-year-in-corporate-credit/

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