One of the consequences of last year’s junk bond blowup was, unsurprisingly, a dramatic decline in high yield gross issuance. The numbers were pretty stark. According to SIFMA, high yield gross issuance in Q1 was 60% less than Q1 2015, following Q4 which was 47% below Q4 2014. As the market has come back since March, for all sorts of [...]
To an economist, the economy can bear no recession. In times of heavy central bank activity, an economy can never be in recession. Those appear to be the only dynamic factors that drive economic interpretation in the mainstream. And they become circular in the trap of just these kinds of circumstances – the economy looks like it might fall into [...]
If there is a shift in the credit scheme of the junk bond bubble of late, the reduced volume in issuance would suggest why. While issuance, including high yield and leveraged loans, has been volatile the past few years it had never been so persistently beaten down as it is now. In other words, there had been “slow” periods in [...]
The deletion of “dollar” capacity in money dealing globally is not just a theoretical impugning upon asset prices alone. Corporate debt issuance has been obviously provoked to an increasingly smaller state. The numbers are starting to become serious, which may account for at least part of the economic misfortune that the Fed desperately wants the world to ignore. Where swap [...]
The central insight into the Minsky moment is really about saturation, as that point represents where any system can no longer sustain growing marginal inefficiency. In fact, it becomes so inefficient that its entire forward dependence is predicated on simply more debt being issued to pay off old debt. In terms of the economy, that means so much financial resources [...]
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