Why Blackrock (And Every Other Bondholder) Is Freaking Out (In 1 Simple Chart)

Jon Alternative Media, Blogosphere, Economy

Just last week, we explained why Blackrock – the largest asset manager in the world – is gravely concerned about the ‘broken’ corporate bond market. Simply put, thanks to The Fed’s continued presence in the Treasury market has left the corporate bond market a liquidity-starved ticking time-bomb if faith in the stability of defaults ever falters (with firm balance sheets at record high leverage) and “selling” begins. As the following chart from Deutsche Bank highlights, the current level of liquid assets as a proportion of total HY assets is about as low as it has been tracking data back around 25 years.

This post was published at Zero Hedge on 09/25/2014.