Bill Gross on High-Yield and Why He's Shorting Bonds

The video discusses the complexities of yield and risk in the investment world, focusing on high yield bonds and their spreads. It explains how to calculate these spreads, considering defaults and recoveries, and compares them to Treasury yields. The interconnectedness of markets, especially when interest rates are low or negative, is highlighted. The video also covers shorting strategies and the use of derivatives like CDX in bond markets, emphasizing the potential for spread widening.

What factors should be considered when evaluating high yield bonds?

How do interest rates affect the pricing of high yield bonds?

What is the significance of the spread in high yield bonds?

What are the implications of a widening spread in the bond market?

Why might an investor choose to short high yield bonds?