Amazingly, there is a RALLY in junk bonds. You literally can't make this up. Just about every hedge fund manager on earth call junk bonds the worse investment in America. These "funds" are being sold to customers by "FINANCIAL ADVISORS" These poor **tards are being told to buy, with a 4% commission, what every reasonable investor thinks is a guaranteed 50% future loss.
To put this in perspective, last year, JCP paid 7% interest on their debt. Since then, rates on junk bonds have fallen almost 150 basis points. THERE'S NO WAY PENNY WILL PAY IT'S DEBTORS.
This is across the board. Last year, companies spent $144bn drilling and fracking gas and oil wells. The break even price for N dakota oil is $82 a barrel. The average price in 2012 was $76. The break even for gas was $8/1000 cu ft. The price was $3.50. There is an ENORMOUS pile of bad debt on the books.
Once junk bonds crash retail is finito. This thing is going to make hiroshima look like a 4th of july fireworks display.
This is perhaps one of the worst crimes perpetrated by Bernanke. He is destroying financially unsavvy seniors who have done the right thing all their lives -- work hard and save for retirement.
I know a woman who is near retirement. She has been quite happy with the returns from her high yield corp and muni bonds. I've tried to explain to her that there is a huge risk with these instruments. Needless to say, in one ear, out the other.
I wouldn't buy a muni with Saddam Hussein's money. The worse thing right now would be a stock market rally. The economic data is unbelievably bad. If you rally oil and gas in the face of a 4% drop in real wages, inflation is going to blow out and dollars are going to become toxic waste.
By the way, isn't it time somebody came out and imprisoned Ackman and that other clown. What right do these two worthless heebs have to play with the lives of people the way they do?