High Yield Below 6.5%?
High Yield credit below 6.5% is a joke. Another distortion of the 2020 CARES Act’s fiscal and monetary bailout-driven policies which persist to this day.
Where would High Yield credits be if companies weren’t doing PIKs? If banks demanded that interest payments be paid each period in cash? Banks are deferring cash payments as they don’t want to end up owning client companies. Banks know their clients would default en masse if they had to make regular cash payments.
The fractional reserve banking system is broken and is the source of monetary inflation and credit risk distortions. Thank the Fed and thank every President from FDR forward - all of whom were foolish enough to believe that fiat money was the equivalent of gold.
