6 Comments
Apr 6, 2023Liked by Ben Lilly, TD

"Meanwhile, U.S. corporate bond issuance has declined since 2021. The total amount issued in 2021 was $1.96 trillion. In 2022, that number was down to $1.36 trillion, a 30% drop."

Remove free money from the equation and the entire scam unravels. Great morning read, thanks guys

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Thank you for reading! Much appreciated!

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Guys, there is a regime change afoot. You need to inverse the CS chart. The market views holding company debt (regardless of its quality) as a safer investment than sovereign debt, particularly U.S. debt

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Why do you think that would be the case?

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Companies are value accretive and have the ability to service their debt whereas the U.S. is purely become a consumption machine. Empirically U.S. Treasuries have been the 'denominator' and are risk-off safe haven assets (as reflected in your graph in 2000 & 2008) but U.S. debt issuances has gotten out of hand, geopolitical players have been maneuvering to obviate trade in the USD and U.S. treasury rates are likely never going to come down, reflecting the inherent risk premium of sovereign default

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Thank you for reading! Much appreciated!

This is certainly another angle of looking at a potential credit event in the future.

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