October 11, 2023 | Daily JAM, Dividend Income, Long Term, Morning Briefing, Volatility |
“Nobody expects the Spanish Inquisition!” Monty Python observed back in 1970 before attempting to torture a coal-miner’s wife with a dish rack. There’s an important investing version of this core truth: The financial market usually worries about the wrong problem. So that when the “Spanish Inquisition” (in financial terms) finally arrives, everybody is surprised. Well, we investors and traders have done it to ourselves again. We’ve spent much of 2022 and a good part of 2023 worrying about whether Federal Reserve interest rate increases would send the economy into a recession. There are still a few recession die hards worrying about that possibility, but by and large the worry has shifted to whether or not the Fed will delay its rate cuts in 2024–and thus delay the arrival of the “rate-cut-bounce.” While MANY–but certainly not all–investors, traders, and market analysts have been looking OVER THERE, however, the credit markets have built up a huge debt overhead and the global debt bomb looks ever closer to exploding. A crisis with the dire effects of the Global Financial Crisis of mid-2007 to 2009 is a possibility. I’d “guess” that most portfolios aren’t ready. The time to get ready is now. This increasingly looks like a debt market crisis of the type known as a Minsky Moment. To get ready first understand the source of the problem. I’m putting together a new Special Report for next week on what to do to get ready. Today’s post is a kind of set up, a get ready for the post on getting ready, if you will.
November 22, 2022 | Daily JAM |
The default rate for U.S. companies will soar to 3.75% if the Federal Reserve’s battle against inflation sends the economy into a shallow recession, according to S&P Global Ratings. A more serious downturn would send the default rate to 6%.
September 27, 2020 | Daily JAM |
... junk bond sales and prices to be a key indicator of cash flows in the market--and of worries about a new surge in coronavirus cases this fall. Until this past week companies continued to raise huge sums--$18 billion in the week ended on September 18--in the market...
August 8, 2020 | Daily JAM, Friday Trick or Trend |
Our regular (or occasional or perhaps occasionally regular) Friday series (actually running on Saturday this week) Trick or Trend looks at what might (or might not) be emerging investible trends. Exclusively on JAM. This post won't run anywhere else. Ever. What does a...
September 13, 2019 | Daily JAM, Mid Term |
Companies sold $13 billion in junk bonds this week, according to Bloomberg. Risk premiums for junk bonds over Treasuries have dropped by 1.5 percentage points in 2019. And at the same time when investors are getting paid less to take on risk, the amount of risk among...
September 11, 2019 | Daily JAM, Mid Term |
Back on August 30 I wrote that several credit rating companies had put the debt of Kraft Heinz (KHC) on their radar screens for a possible downgrade to junk status from investment grade. That would be, I noted, a big deal both for Kraft Heinz and the bond market as a...
August 30, 2019 | Daily JAM, EUM, Volatility |
As I wrote in my August 26 post "Risk and uncertainty soared on Friday--and not for the reasons you might first think" I think that Friday's retaliatory tariffs from China and then the Trump administration's retaliation to the retaliation--plus rhetoric from President...
June 5, 2019 | Daily JAM, Morning Briefing, Special Reports |
Finally, Part 1 The Crisis in Global Demand, from my Special Report: The Crisis in Global Capitalism and 5 Ways to Position Your Portfolio. On May 29, U.S. stocks took another step lower with the Standard & Poor's 500 closing down 0.69% at 2783. Â News reports on...
November 9, 2018 | Daily JAM |
I've written more than once about my conviction--and consequent worry--that we're headed for a global credit crunch sometime in the next three to four years. I'm looking for the kind of Minsky Moment that sees financial markets go into chaos as global liquidity...
July 13, 2018 | Daily JAM, Volatility |
Looking for signs that lenders are taking on more risk and driving the credit markets to shakeout and a Minsky Moment, when suddenly credit gets not just expensive but really scarce? Here's one. Now the regulators have loosened up on Wall Street, the country's biggest...
December 14, 2015 | Daily JAM, Friday Trick or Trend, Volatility, You Might Have Missed |
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...
November 3, 2014 | Daily JAM |
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...