When Fear Trumps Greed: Negative-Yielding Bond Pile Grows

The video discusses the prevalence of negative yields in German and Japanese debt markets, highlighting the limited impact on corporate debt. It explores liquidity issues in high yield markets, referencing past events like the 3rd Ave fund's challenges. The impact of Brexit on debt issuance is analyzed, with a focus on the high yield market's response to commodity price changes. The video concludes with an analysis of the high yield market excluding the energy sector, noting deteriorating fundamentals and increasing leverage.

What is the main concern for foreign investors in the US high yield market?

• Brexit impact on the market

• Liquidity issues in property funds

• Negative yields in corporate debt

• Search for higher yields

What was unique about the 3rd Ave fund in the context of liquidity?

• It was unaffected by market trends

• It had no retail investor outflows

• It was a distressed fund offering daily liquidity

• It was a highly liquid equity fund

How has Brexit influenced the issuance in the high yield market?

• No change in market dynamics

• Increased issuance of triple C debt

• Decreased issuance in the lowest quality portions

• Increased issuance of high-quality bonds

What is the current state of default rates in the high yield market excluding energy?

• Unchanged from previous years

• Relatively benign in the near term

• High and increasing

• Significantly decreasing

What trend is observed in non-commodity high yield markets regarding leverage?

• Leverage remains stable

• Leverage is irrelevant to market dynamics

• Leverage is at an all-time high

• Leverage is decreasing