We’re not in the hyperbolic, click-baiting business of labeling markets bubbles. That said, certain market components can absolutely look and behave like bubbles.
Hedgeye CEO Keith McCullough recently posed this question in regard to bubbles: “Why do you have the biggest bubble in corporate credit history?”
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“You have the all-time lows in credit spreads, pretty much the lowest level of interest rates and access to capital, and you have the all-time high in year-over-year earnings growth fully loaded with tax reform,” McCullough explains on The Macro Show. “That’s why people felt safe putting leverage upon leverage upon leverage. It’s a bubble.” |
McCullough pulls up a key chart and explains why we’re at a really asymmetric point in terms of the credit cycle. “Once the horse leaves the barn on the domestic credit cycle stuff blows up.”
Watch the full clip above for more.
