Deep Dive – January 2020

Published on: January 27th, 2020

Last November, Julian Brigden wrote about shale as a “bezzle”. This month he wants to highlight the rise of leveraged lending as another potential “bezzle”. Leveraged lending and the associated CLOs which buy the loans have been critical to financing the Private Equity buying spree we have had. How robust will this financing be if we have an economic downturn?

Comments

  • JK
    James K.
    28 January 2020 @ 16:09
    Not a word about CoV .... and the potential implications ... ? That means it is a “Non Event”... ?
    • HM
      Harry M. | Real Vision
      29 January 2020 @ 17:57
      Hi James. So far CoV is mostly damaging demand in China, and equity market sentiment over here. But really this is a subject for epidemiologists, and its a bad idea to present ourselves as experts on this area. Its definitely a bear factor and is supportive of RPs bullish call on Fixed Income. It certainly isnt a non-event, but, speaking personally, my suspicion is that it is a little over-hyped. My understanding is that it is very contagious, but morbidity rates are not particularly high. That said, I am not an expert either. I can see it has the potential to be even more bond bullish. Why go to a mall if you might get sick?
    • JK
      James K.
      30 January 2020 @ 18:29
      IMO a quite possibly a “Black Swan” event in a market priced to perfection....
  • AS
    Amit S.
    30 January 2020 @ 01:51
    IMHO this is a seminal piece by Julian for MI. His warning may prove prescient in about 12-20 months time.
  • JA
    Joseph A.
    28 January 2020 @ 13:34
    Thanks Julian, mostly followed the thread and key take away. Please confirm bottom of page 5, $5 trillion IG bonds means Investment Grade?
    • HM
      Harry M. | Real Vision
      29 January 2020 @ 17:58
      Exactly Joseph.