As measured by the ratio between HYG (Junk Bonds) and TLT (US Government Bonds, 20 Year).
HYG is now outperforming TLT by 14% from the extreme level as that seen in late 2008.
Clearly the fears have outweighed the evidence for this disproportionate pricing of junk bonds.
Back in 2008 we had financial firms closing their doors, Lehman, AIG, Bear Stearns, Banks were going under, the Gov't was taking over the banking system and spending $1Trillion to get the economy going again. Housing prices were plunging and home loans couldn't be made. Banks weren't making loans. Unemployment was surging to 10%+...
And yet, compare that to 2015... nothing could be further from those events.
Smooth sailing ahead!? Never. Fears relived are just as real as the first time.
Tim
3/11/2016 11:25AM EST
HYG is now outperforming TLT by 14% from the extreme level as that seen in late 2008.
Clearly the fears have outweighed the evidence for this disproportionate pricing of junk bonds.
Back in 2008 we had financial firms closing their doors, Lehman, AIG, Bear Stearns, Banks were going under, the Gov't was taking over the banking system and spending $1Trillion to get the economy going again. Housing prices were plunging and home loans couldn't be made. Banks weren't making loans. Unemployment was surging to 10%+...
And yet, compare that to 2015... nothing could be further from those events.
Smooth sailing ahead!? Never. Fears relived are just as real as the first time.
Tim
3/11/2016 11:25AM EST
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