Hey there my fellow gay webmasters!
The other night I was trawling the web looking at stuff and came across an interesting audio webinar by H.S Dent, who is a pretty well known(infamous?) bear.
Anyway, the webinar went through the current status of the junk bond market and pointed out some alarming irregularities. Firstly, because of constant QE the money that is getting pumped into the economy needs to go somewhere and invariably is ending up in the higher yield debt products. Secondly, the fracking companies make up around 17% of the junk bond market in the U.S.
So basically Dent is making the argument with the oil price currently at $49/barrel that fracking is unprofitable in the U.S and subsequently there could be significant defaults within the junkbond market which is now worth over 2 trillion dollars. He believes it could be the trigger for another global downturn.
So what say you all...is the current low oil and commodity prices going to touch off another issue within the financial system because of all the funny money floating around the U.S which has ended up in junk bonds??
I'm not sure...but I do think a market correction is def coming at some point...you cant continue to inject those sort of funds through OMO without creating bubbles.
Interested in Opinions...
The other night I was trawling the web looking at stuff and came across an interesting audio webinar by H.S Dent, who is a pretty well known(infamous?) bear.
Anyway, the webinar went through the current status of the junk bond market and pointed out some alarming irregularities. Firstly, because of constant QE the money that is getting pumped into the economy needs to go somewhere and invariably is ending up in the higher yield debt products. Secondly, the fracking companies make up around 17% of the junk bond market in the U.S.
So basically Dent is making the argument with the oil price currently at $49/barrel that fracking is unprofitable in the U.S and subsequently there could be significant defaults within the junkbond market which is now worth over 2 trillion dollars. He believes it could be the trigger for another global downturn.
So what say you all...is the current low oil and commodity prices going to touch off another issue within the financial system because of all the funny money floating around the U.S which has ended up in junk bonds??
I'm not sure...but I do think a market correction is def coming at some point...you cant continue to inject those sort of funds through OMO without creating bubbles.
Interested in Opinions...
