cma

Life After Citi: Shorting High Yield Bonds

"bulk of the high-yield spectrum continues to trade on yields which reflect, comparatively, near-investment-grade rating".
What world is he living in. High-yields bonds are showing a 20% current yield, hardly reflecting "near-investment-grade rating."
His other methodological error (one he made with Russian equities) is that when the message of two markets (CDX Indexand real yields) are contradictory, CDX index will always be the more accurate predictor. History has shown this to be invalid.

Life After Citi: Shorting High Yield Bonds

The author has just discovered a short in high yield bonds after the spread over Treasuries has widened to historically high levels. He is about 6 months late to the party. Also, junk bond yields imply default rates higher than in 1933.