“It’s contained until it isn’t.”
On Thursday, a junk-bond fund imploded, the first since the Financial Crisis.
For over a year, we’ve reported on junk bonds, many of which have now crashed. We’ve warned about bond funds, like the one that imploded. They’re structurally unsound. They’re liquid for investors who can sell them with the click of a mouse. But the underlying bonds are illiquid and often cannot be sold at all, except to hedge funds that are betting against the bond fund.
On Friday, I appeared on the radio show, Stocks & Jocks hosted by financial industry guru Tom “The Chief” Haugh, with Kathy Dervin and futures broker Kevin O’Neill. We discuss the implosion of the bond fund, the broader junk-bond fiasco, how it impacts stocks, and how, like the housing crisis, it’s always contained – until suddenly it isn’t.
Below are my 20 minutes with Stocks & Jocks. The whole two-hour show is here.
And here’s my article: Read… It Starts: Junk-Bond Fund Implodes, Investors Stuck