For years, nothing could slow the tsunami of junk debt. But suddenly, something happened, and investors in leveraged-loan mutual funds, where the crappiest junk debt accumulates, ran scared and started pulling their money out. Consequences were immediate.
It happened in 2000 and in 2007. With spectacular consequences. Now, it happened again. And hidden beneath the blue-chip highs, parts of the market are already crashing.
By now, this wondrous bull market constantly gets benchmarked against the dotcom bubble. It’s different this time, we’re told, even on NPR. But the wholesale destruction of financial assets has already started, one pocket at a time.
By Don Quijones: “Spain’s banks are back on track,” the Spanish Banking Association announced to great fanfare. That’s the official story. But these banks reported financial results that “bear no relation to reality.”
Q1 GDP growth is trending at a tepid 1.5%. But don’t worry. It’s the weather! Wall Street is predicting “escape velocity” for the fifth spring-summer in a row. Why? Because it’s already priced into the stock market!
By Don Quijones: With more back channels and revolving doors to governments around the world, Monsanto is used to getting its way. But now it faces an outright rebellion.
A report from the asset management and investment banking division of Groupe BPCE, the second largest bank in France, predicts what daredevil voices at the maligned margin of financial analysis have worried about for a while: another global financial panic.
“Biotech Stocks’ Rout Perplexes Analysts” the WSJ headlined the phenomenon, as analysts continue to hype this stuff to small investors. But hedge funds are dumping stocks, and private equity firms are dumping their LBOs. That’s the Smart Money. They’re getting out.
It “tried to keep its rewards and shed its responsibilities by playing a corporate shell game, putting its oil-and-gas business in a new entity and leaving behind a bankrupt shell” with environmental liabilities of defunct, polluting businesses.
By Abigail Field, Attorney, Benzinga: Congress is infamous for doing nothing, as people who have lost their unemployment benefits viscerally know. However, today the Senate Financial Services Committee started the process of enacting the “Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.” This act addresses dozens of tax breaks that ended last year. If the…