02/12/18

Corporate America's Next Crisis: The $1.6 Trillion "Debt Tsunami Of Worry"

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Corporate America's Next Crisis: The $1.6 Trillion "Debt Tsunami Of Worry"
// RSS

Much has been said about the threat that some $3 trillion in BBB-rated bonds (out of a total investment grade universe of $6.4 trillion) present to the credit market, with growing fears that the next economic slowdown will see over $1 trillion in "fallen angel" credit swamp the junk bond market, sending yields and spreads sprinting higher. Less has been said about the risk of higher-rated A and AA bonds being downgraded to BBB on their way to junk (although we touched on this threat too last Friday in "A Record $90 Billion A-Rated Bonds Downgraded To BBB In Q4").

But while the risk of a wholesale downgrade of the investment grade market is increasingly being priced in by the market - even if the timing remains suspect and might even be postponed if the Fed were to cut rates in 2019 as JPM observed overnight when noting the inversion in the front-end (2Y-1Y forwards spreads) of the US curve, a new big concern for the credit market is emerging, and here the timing of the imminent threat is all too urgent.

Because while some may be tempted to ignore the BBB downgrade "wall of worry", corporate America is now facing a "maturity tsunami of worry" that is some 1.6 trillion dollars high.

As the following chart from BNP Paribas shows, a wall of maturing debt is about to slam head on into S&P 500 companies. Commenting on the chart, BNP understandable writes that it is "concerned by the maturity wall of bonds that need to be refinance over the next few years." And, as Bloomberg's Sebastian Boyd observes, said maturity wall is made even scarier by adding the amount available in untapped revolvers, which is money that in theory doesn't need to be paid back and splits the counterparty risk with the company's bank lenders (see GE).

More than a wall, the debt coming due is a wave that has been building for a decade. Or, as we called it above, a tsunami, which will hit both viable and "zombie" companies with billions in higher interest expense costs once the .....

Yuan Surges In Early Trading, Signals 2800 Open For The S&P

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Yuan Surges In Early Trading, Signals 2800 Open For The S&P
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For now, FX markets remain the only 'liquid' course of reflection on the Trump-Xi trade-truce 'deal' and China's offshore yuan has spiked over 6 handles (back below 6.90/USD) implying a solid jump at the open for US equity futures...

A big jump for sure in offshore yuan but remains well below the early Nov spike highs...

On a side note, JPY has weakened, but remain unable to .....

Guerra Commerciale: ecco perché non possiamo aspettarci molto da G20

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Guerra Commerciale: ecco perché non possiamo aspettarci molto da G20
// Money.it

Il 2018 è stato caratterizzato dalla guerra commerciale tra le prime due economie mondiali. Ora, in vista dell'incontro tra il presidente Usa Donald Trump e Xi Jinping in occasione dl G20 di Buenos Aires, gli operatori sono pronti a scommettere che sarà questo il catalizzatore capace di innescare il rally di natale.

Trump in vista del meeting ha ....

License To Rally? Not So Much For Now...

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License To Rally? Not So Much For Now...
// RSS

Authored by Sven Henrich via NorthmanTrader.com,

Our job is to navigate changing markets and we use technical and macro analysis to identify major market turns amidst periods of conflicting signals, emotional markets and ....

"This Is Nuts" Mauldin Exposes The Pyramids Of Crisis

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"This Is Nuts" Mauldin Exposes The Pyramids Of Crisis
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Authored by John Mauldin via MauldinEconomics.com,

In an increasingly divided world, we all share one great desire: self-preservation. Not just humans, either. The survival instinct exists in almost every living thing. Humans simply have greater ability to do something about it.

In fact, we have been doing something about it for many thousands of years. An inverted pyramid of geniuses and giants, modern medicine, nutrition, sanitation, and assorted other innovations has extended our ....

Il gioco cinese, a lato del G20

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Il gioco cinese, a lato del G20
// Contropiano.org

Questa notte si è raggiunto un accordo-tregua tra Usa Cina. Si bloccano i dazi e partono negoziati fino a marzo. Obiettivo: liberalizzare le rispettive economie, soprattutto quella cinese. Un accordo si è raggiunto per l'importazione "immediata" di prodotti agricoli, energetici e industriali americani. Il contendere è liberalizzare il capitale monopolistico […]

L'articolo Il gioco cinese, a lato del G20 su Contropiano.


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JPMorgan Spots A Rare And "Even Worse Omen" For The Market

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JPMorgan Spots A Rare And "Even Worse Omen" For The Market
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When it comes to timing the next recession - or the next Fed policy mistake - there are few signals that pundits rely more on than the shape of the yield curve, which, as we have covered extensively in the past year, has bear flattened dramatically since 2015 as the Fed has hiked rates, with the 2s10s now just a tiny 20bps away from inverting at which point the countdownto both a recession and a bear market begins.

However, at a time of unprecedented central bank meddling and manipulation in all rates (and equity) markets, many believe that the longer-dated curve is no ....

Climate Catastrophe? Scientists Say The Global Food Supply System IS BROKEN

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Climate Catastrophe? Scientists Say The Global Food Supply System IS BROKEN
// Silver Doctors

"…without vast reductions in individual freedom and liberty (such as the liberty to decide what to eat and how much) the problem won't resolve." by Mac Slavo of SHTFplan The �…�

The post Climate Catastrophe? Scientists Say The Global Food Supply System IS BROKEN appeared first on Silver Doctors.


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Trump congela aumento dazi doganali a merci provenienti da Cina

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Trump congela aumento dazi doganali a merci provenienti da Cina
// Sputnik Italia – Ultime Notizie, Fatti e Analisi: foto, video, infografica

Donald Trump ha accettato di non aumentare i dazi doganali alle merci importate dalla Cina dal 10% al 25% a partire dal 1° gennaio come precedentemente pianificato, ha riferito la portavoce della Casa Bianca Sarah Sanders.
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Dove si nascondono i moderati

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Dove si nascondono i moderati Di Marcello Veneziani Ma che fine hanno fatto i moderati, si chiede Antoniohttps://www.finanzaelambrusco.it/articoli/articoli/politica/dove-si-nascondono-i-moderati/