Credit - The Second Wave - EvergrandeIdea for Credit:
- Stocks had a bit of a reprieve as China's collapsing property firms were halted for 2 weeks, and China's markets had gone on holiday for Golden week.
- Stock market had an unwinding of hedges last week, but are things really 'Back to Normal'?
- The bond market does not think so, and seems to be presaging more drawdown to come.
- EM High Yield has been in capitulation, while US Corporate bonds and HY are accelerating their declines.
- High Yield Spreads are about to breakout.
- This is a problem that has not simply gone away, but rather will only get worse.
- Nikkei had even erased all losses of the year in 2 weeks, then lost them again in 2 weeks more, to continue its bear market:
- Remains to be seen how far-reaching the effects will be on China's 5T property market. The drag on global property market is real:
More to come on that later.
The stock market has its best days in bear markets as volatility increases, and this is really telling of the situation. I think we are already in a global bear market and recession.
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GLHF
- DPT
