HYG/TLT ratio approaching 2007 peak. Amazing! That high was…
HYG/TLT ratio approaching 2007 peak. Amazing! That high was made with credit risk pummeled into dust. This high is being made because high yield credit is that much stronger than government bonds this year. This is a crashy setup if economy sinks.
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Here is high-yield credit spreads. That high in 2007 was made at an all-time low in credit spreads over treasures (dipped below that green line from the 1997 low! This high is being made at the point where financial markets have previously gone into a tailspin.
Another expression: HY spread divided by 10-year treasury yield. The last low was made in September 2018.