The effort to recreate the disaster of 2008, but on an even more colossal scale, is moving along at a brisk pace. In the past several months, we have seen the triumphant return of many of the worst practices of 2006/07 to such an extent that I have made it a key theme of this site in 2014. For those of you playing catchup, I suggest reading the following:
Junk Borrowers Are Increasingly “Adjusting Earnings” to More Easily Sell Debt
Credit Mania Update – The Chase for CCC-Rated Bonds
Is the Credit Bubble Popping? Carlyle Group Warns on Frothiness and Junk Bond Deals Get Pulled
Guest Post: Is There a Massive High Yield Credit Bubble?
The signs of credit and financial market insanity are everywhere, and it appears we have now entered the late stages of what Mises called the “crack-up boom.” When this cycle runs its course and crashes to the ground is of course impossible to predict, but cycle work from folks like Martin Armstrong point to a turning point sometime in mid-to-late 2015.
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