Riding the Momentum in Credit

Featuring Jeff Kronthal

Jeff Kronthal gauges the status of the credit cycle, based on his 40 years’ experience in the markets, as the extended economic recovery continues and corporate debt climbs ever higher. Identifying how much further we have to run, Jeff also examines the impact of beta products like ETFs on credit and rates, as well as the opportunity in European CLOs. Filmed in New York on September, 11, 2017.

Published on
25 September, 2017
Topic
Volatility, Credit Market, Global Outlook
Duration
35 minutes
Asset class
Bonds/Rates/Credit, Real Estate, Equities
Rating
57

Comments

  • TA

    Tahsin A.

    2 7 2018 00:58

    0       0

    Goodness - I just joined RealVision yesterday and this interview is amazing ... he got pretty much everything spot on - long vol, short IG spread, low deafult rates (hence low HY spreads) , trade worries, .... would love to hear his thoughts now ...

  • OB

    Olivier B.

    1 10 2017 04:06

    0       0

    How can individual investors access the CLO space to invest in?

  • PP

    Patrick P.

    29 9 2017 08:24

    7       0

    I thought Bill was outstanding as an interviewer....very well prepared. Didn't try to insert his views.

  • MD

    Mathieu D.

    27 9 2017 20:21

    2       0

    Another great one. Glad to see more credit focused interviews here. I didn't quite get how the cov-lite kept the number of defaults down in the CLOs during the GFC. "where you see issues with companies who you know are going to
    default in the future but they aren't being triggered, and they have a little time to work
    through, it actually can decrease the amount of defaults." Anyone got that? I would really want to understand this one. Thanks

  • RA

    Robert A.

    25 9 2017 23:23

    4       0

    Nice balancing by RV again with a fairly positive credit outlook by a gentleman who has the gravitas to render the opinion (great job by the interviewer, IMO). I'm struck by how the Reinhardt & Rogoff seminal "This Time is Different" scenario of low interest rates and low growth continues to play out. I never really understood why the R & R data through so many aftermaths of credit blow ups was so one sided to the low rate and low growth side. Someday we may figure out the "why" (other than just too much debt), but it sure seems like R & R may have nailed it for this cycle as well.

  • JH

    Jesse H.

    25 9 2017 22:45

    10       0

    Interesting and enjoyed the last part of the interview particularly. In the context of a "safer" banking system, yes from a regulatory point of view -- would probably agree here. However, we need to look at the whole system, not just the banks. When you look at Fed and government "leverage", we effectively have a sadly insolvent and over-leveraged system...the nexus of the leverage has just shifted, that's all.

    With respect to the QE discussion, one reason I think we've had a slower recovery post 2008 in the US is that you have to look at WHERE the money went -- it went to financial actors who, surprise, surprise, did not put the money into the real economy, either held it to shore themselves up in light of new regulations or put it back into the financial markets. Hence rich people paying absurd sums for art on NYC and overpriced apartments. We have definitely had inflation, it has just been localised to the markets where those who profited most from QE put their money. If the Fed had instead distributed a public dividend across every household in America, we would have seen a very different distribution of the "recovery" but also perhaps some inflation. Not sure that would have been significantly better, but hard to say.

  • HJ

    Harry J.

    25 9 2017 19:03

    1       0

    What about the corporate debt refinance looming?

  • VK

    Vladimir K.

    25 9 2017 11:48

    6       0

    Good, deep insights. Will rewatch in some time. Thank you, Jeff.