The media continues to claim that the only sectors in trouble of a slow down are commodity players, particularly energy.
It’s a nice narrative: everyone knows that Oil and other commodities have collapsed in value, putting pressure on their producers.
Unfortunately, it’s not true.
The world has been on a massive borrowing binge since 2009.
Below is a chart of the US corporate bond market. Note that it goes absolutely vertical after the Fed cut rates to zero (2008).
 
Previously, it took the corporate bond market over 50 years to reach $3 trillion in size. But in the borrowing binge of the last seven years, it’s added nearly another $3 trillion.
The quality of these bonds is questionable at best. The average rating for corporate debt in the US is BB or “junk” status. All told, since 2012, 75% of companies accessing the bond market have had a credit rating of single-B.
To put this into perspective, this means that the quality of corporate bonds being issued today is LOWER than it was during and right after the 2008 meltdown: a time when everyone thought the world was ending.
And the collapse has already begun. Default rates for 2016 are on track to outpace those of 2009: again a time when everyone thought the world was ending.
And if you believe the defaults will be isolated to Energy companies, you’re mistaken. Corporate leverage has skyrocketd in the last four years. And as we noted earlier, the quality of the bonds being issued is suspect at best.
The corporate bond market is a ticking time bomb waiting to go off. By the looks of things, the fuse has already been lit.
On that note, we are already preparing our clients for a market meltdown with a 21-page investment report titled Stock Market Crash Survival Guide.
In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.
We are giving away just 1,000 copies for FREE to the public.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.html
| 
