Abby Joseph Cohen: More Damage Ahead for Credit Markets

The video discusses the challenges faced by the bond market, highlighting historical losses and the role of central banks in maintaining low interest rates. It predicts further damage in credit markets due to illiquid securities but also identifies potential investment opportunities for bond investors, offering yields of 3-4% as some of the best in 20 years.

What unusual trend has been observed in the bond market recently?

• Both yields and prices have decreased.

• Both yields and prices have increased.

• Yields have increased while prices have decreased.

• Yields have decreased while prices have increased.

What role did central banks play in the bond market's overvaluation?

• They restricted bond trading.

• They sold large amounts of bonds.

• They kept interest rates nominally low.

• They increased interest rates significantly.

Which of the following was a common characteristic in 2/3 of major economies, excluding the US?

• High real yields

• Negative real yields

• Stable real yields

• Fluctuating real yields

What is a potential future concern for the credit markets?

• Decreased interest rates

• Increased liquidity of securities

• Unseen damage due to illiquid securities

• Stable market conditions

What opportunity is available for individual bond investors now?

• Achieving a 6% yield

• Achieving a 1% yield

• Achieving a 5% yield

• Achieving a 3 or 4% yield