Is the Fed fighting a credit markets freeze up?
- Thread starter nooby_mcnoob
- Start date
I assume it must be some heavy leveraged hedgefunds
Then why are large companies drawing down their entire credit lines?
This shows you once again how fuxked the financial well being of the country is. It's once again the issue of too big too fail. Remember those stress tests they did, that was all fuxking make believe. Also amazes me that once again we aren't having the free markets dictate where the markets are supposed to go, but rather manipulate the marketplace to the point where they cannot sustain themselves as they will always need fed intervention!!!!
All this credit manipulation and money pumping is much like government deficit spending... always trying to get something for free.
Hey bro, the Fed is panicking because the corporate debt market is imploding.
Federal Reserve Bank of Boston President Eric Rosengren said on Friday the U.S. central bank may need the power to buy a broader array of bonds to provide stimulus given the sharp and historic decline in Treasury yields
"...what they [are] worried about is a fat tranche of BBB rated securities that has mushroom fivefold since 2008 to $3.4 trillion and is precariously perched on the cliff-edge. The slightest shock could lead to a cascade of downgrades."
"...most of the $2.4 trillion leveraged loan market is being packaged into collateralised loan obligations on 'cov-lite' terms with scant protection for creditors and is now an accident waiting to happen."
“Our estimate is that there is potentially as much as a trillion dollars of high-grade bonds heading to junk”
“That supply would swamp the high yield market as it would double the size of the below investment grade bond market. That alone would widen spreads even without the effect of increasing defaults.”
“There are mounting risks of a credit crunch in vulnerable sectors of the corporate bond market. $3.4 trillion of US debt is perched precariously above junk grade, risking fire-sales in a financial crisis. A swath of highly indebted companies face an incipient funding shock and risk being shut out of the capital markets as the COVID-19 epidemic mushrooms into global crisis, Standard & Poor’s has warned….
...while the stock market is attracting all the attention, the real danger lies further below the surface in corporate bonds and leveraged loans, two IEDs that could explode at any time precipitating a wave of defaults that increase deflationary pressures and clear the way for another financial crisis.
https://www.eurasiareview.com/11032...ing-credit-crunch-the-next-shoe-to-drop-oped/
https://www.investmentnews.com/market-slide-puts-focus-on-companies-balance-sheets-189722
https://www.elitetrader.com/et/threads/credit-crunch-2-0.341436/#post-5032997
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Hey bro, the Fed is panicking because the corporate debt market is imploding.
Federal Reserve Bank of Boston President Eric Rosengren said on Friday the U.S. central bank may need the power to buy a broader array of bonds to provide stimulus given the sharp and historic decline in Treasury yields
"...what they [are] worried about is a fat tranche of BBB rated securities that has mushroom fivefold since 2008 to $3.4 trillion and is precariously perched on the cliff-edge. The slightest shock could lead to a cascade of downgrades."
"...most of the $2.4 trillion leveraged loan market is being packaged into collateralised loan obligations on 'cov-lite' terms with scant protection for creditors and is now an accident waiting to happen."
“Our estimate is that there is potentially as much as a trillion dollars of high-grade bonds heading to junk”
“That supply would swamp the high yield market as it would double the size of the below investment grade bond market. That alone would widen spreads even without the effect of increasing defaults.”
“There are mounting risks of a credit crunch in vulnerable sectors of the corporate bond market. $3.4 trillion of US debt is perched precariously above junk grade, risking fire-sales in a financial crisis. A swath of highly indebted companies face an incipient funding shock and risk being shut out of the capital markets as the COVID-19 epidemic mushrooms into global crisis, Standard & Poor’s has warned….
...while the stock market is attracting all the attention, the real danger lies further below the surface in corporate bonds and leveraged loans, two IEDs that could explode at any time precipitating a wave of defaults that increase deflationary pressures and clear the way for another financial crisis.
https://www.eurasiareview.com/11032...ing-credit-crunch-the-next-shoe-to-drop-oped/
https://www.investmentnews.com/market-slide-puts-focus-on-companies-balance-sheets-189722
https://www.elitetrader.com/et/threads/credit-crunch-2-0.341436/#post-5032997
Thank you!!! Was this happening before beer virus?