Oaktree's Marks Says Junk Bond Rally Can't Last

The video discusses the evolution of risk in investing, highlighting historical default rates and the impact of the 2008 financial crisis. It examines the current rally in high yield debt, questioning its sustainability and the influence of optimistic market sentiment. The discussion shifts to economic outlooks, focusing on the Federal Reserve's likely strict stance on monetary policy amid recession and inflation concerns.

What was the average default rate for high yield bonds from 1978 to 2008?

• 8% per year

• 6% per year

• 4% per year

• 2% per year

How does the speaker view the sustainability of the recent rally in high yield debt?

• Prices will fluctuate wildly

• Prices will continue to rise indefinitely

• Prices are roughly sustainable but won't keep rising

• Prices will fall sharply

What is the current market sentiment regarding the recession and inflation?

• Concerned about hyperinflation

• Neutral with no clear direction

• Optimistic about a mild recession and easing inflation

• Pessimistic about a severe recession

What is the speaker's view on the Federal Reserve's likely approach to monetary policy?

• The Fed will be very optimistic and accommodative

• The Fed will maintain a strict stance throughout the year

• The Fed will frequently change its stance

• The Fed will ignore inflation concerns

Why does the speaker believe the Fed does not want to be seen as optimistic?

• To maintain credibility and stability

• To encourage more spending

• To increase inflation

• To support the stock market