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Cory’s Chart Corner
Great chart from @crescatkevin on growing delta between CCCs and BBBs. Carry-on as if everything is normal!
The second indicator is widening CCC vs. BBB credit spreads.
Credit markets are generally quicker to pick up on deteriorating corporate cash flows than equity markets. While the S&P 500 Index has been hitting new all-time highs over the past six months, US triple-C credit
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What triggers a crash? Just psychology
John Hussman’s July letter kicks off with a timeless John Galbraith quote: And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by … Continue reading
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Pent down demand weighs on global growth and inflation
June’s US consumer price index (including clothes, groceries, restaurant meals, recreational activities and vehicles) increased 5.4% from a year ago, the highest 12-month rate since August 2008. The so-called core price index, which excludes food and energy, rose 4.5% year … Continue reading
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Monetary policy impotent during a balance sheet recession
Between 2008 and 2019, excess capacity, slow growth and never-ending central bank liquidity injections suppressed interest rates and encouraged corporations to magnify profits by increasing their debt. This meant that the corporate sector came into the 2020 recession with record … Continue reading
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