Corporate Bonds Could Be on the Verge of a Crash

The video discusses concerns about the growth of Triple B rated corporate debt and the potential risks if these bonds are downgraded to junk status. It highlights the market trends, showing a rally in Triple B bonds and their significant presence in mutual fund portfolios. The Bank for International Settlements reports that Triple B bonds have doubled in mutual fund portfolios since 2010. The video also compares the growth of Triple B bonds to AA bonds, noting the former's rapid expansion. The discussion concludes with a debate on deleveraging and the future outlook, especially in light of General Electric's financial troubles.

What concerns are raised regarding the triple B rated sector of corporate debt?

What are the potential consequences of a rash of downgrades to junk rating in the corporate debt market?

What is the significance of the compression in the yield spread for triple B rated bonds?

How has the percentage of triple B rated bonds in US and European mutual fund portfolios changed from 2010 to 2018?

What implications does the increase in lower rated debt have for investors in investment grade bond funds?