Operating at the Intersection of Technology and the Capital Markets
Tag: defaults
High Yield defaults are expect to increase as one would expect. The great unknown is how many fallen angel securities (investment grade securities that are downgraded to high yield status), will there be? This is an open question as for the past number of years billions of Dollars of low quality debt has been packaged … Continue reading High Yield Defaults To Climb
The auto loan market is a leading indicator to the broader economy. Used car values are near record levels but have traded lower for three consecutive months. More used car loans will be underwater as used car values decline. Thus, the risk of loan default rises. LTV's exceed 100% while underlying asset values decline. This … Continue reading A Softening Used Car Market Does Not Bode Well for The Economy
Investors have lost their minds when it comes to high-flying stocks such as Tesla (TSLA, up 830% over 13 months), Shopify (SHOP, up 210% over 4 months), DataDog (DDOG, up 220% since the March lows), and many other names where valuations are based on anything but the fundamentals. Why? There Is No Alternative (TINA): The … Continue reading TINA, ZIRP, The Future & The Retail Investor
We are due for an equity market shakeout. The NASDAQ is up 450% since January 2009. The 26% spike in the NASDAQ from October 2019 to February 2020 on a lack of supporting fundamentals is like nothing I've ever seen. By late March we had traded down 30% from February's high yet we have gained … Continue reading The Market Is Upside Down
There is significant credit risk that is not priced into the markets. Looming credit defaults and downgrades - especially high grade to high yield downgrades ("fallen angles") - are bound to create uncertainty beyond the credit markets. There is significant default and downgrade risk associated with Commercial Real Estate ("CRE") credits. Nobody knows when major … Continue reading Credit Risk Is Substantial and Underestimated
We are doing a bit of work around derivatives exposure. Overnight we reviewed U.S. personal savings rates as a percentage of personal disposable income for the January 1959 - May 2019 period on a monthly basis. The personal savings rate has bounced between 6-8% since January 2013. This is in-line with the mid-to-late 1990's period. … Continue reading U.S. Personal Savings Rates 1959-2019
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