Howard Marks' Oaktree Upper-Case Missive Of The Alphabet Spots A $1 Trillion Chance Inward The Coming Bond Crash

From ZeroHedge, June 1:

Back inward November, withal smarting from a yr he would rather forget, Russell Clark too his Horseman Capital, i.e. the "world's nearly bearish hedge fund" unveiled what he would curt next: according to Clark, the adjacent major root of alpha would hold upward shorting fallen angel bonds.

Citing a recent International Monetary Fund Global Financial Report, Clark said that "US investment flat debt is really depression quality, too could attain about large fallen angels [and] usual funds are much larger inward the high yield marketplace put than they used to be. [L]ow rates agency the working capital missive of the alphabet losses are much higher than they used to be. And that investors inward high yield usual funds are much flightier than they used to be! Essentially the International Monetary Fund are telling me that if you lot become a large plenty fallen angel, the high yield marketplace put volition freak out, too volatility volition spike causing volatility targeting investors to dump leveraged positions. Sounds expert to me."

One calendar month later, inward the aftermath of of Steinhoff fiasco, inward which the ECB constitute itself long tens of millions of bonds inward a fellowship which went from investment flat to deep junk after it was revealed that it may accept engaged inward occasional fraud, crashing the bonds...

"The Coming High Yield Downturn Will Be Big, Long, And Ugly"