There Have Never Been So Many Bonds That Are Almost Junk – The Wall Street journal

There Have Never Been So Many Bonds That Are Almost Junk – The Wall Street journal

There Have Never Been So Many Bonds That Are Almost Junk

What is left unsaid in this article is that we still view risk through the prism of the rating agencies. Suppose a large % of the bonds clustering at near junk levels are really not investment grade? Is there rating agency inertia to downgrade from IG to BIG?

Maybe there is a large number of shadow junk hidden amongst the BBB cluster. If so bond risk is far greater than that viewed through the distorted rating agency lens.

https://www.wsj.com/articles/there-have-never-been-so-many-bonds-that-are-almost-junk-1537466036

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