patrick.net

chanakya4773 says

maybe i am ignorant, can you explain me the credit bubble in US stocks or US economy in general which is sensitive to interest rate hikes ?

Here is my definition of a credit bubble: A company that was fighting for its existence 15 years ago, sells 17B worth of long term bonds at records low spread over treasuries, so that it can buy back shares and pay dividends.

treatmentreport says

Here is my definition of a credit bubble: A company that was fighting for its existence 15 years ago, sells 17B worth of long term bonds at records low spread over treasuries, so that it can buy back shares and pay dividends.

That's a poor definition then. A company's health 15 years ago likely doesn't have much correlation with its ability to pay bills today. 15 years is a long time.

A better definition would a company that is fighting for its existence today getting 17B worth of long term bonds at low spreads.

Interesting the 1Q GDP has been revised lower to 1.8%. I wouldn't be surprised if the Dow comes down to 8,000 or even 7,000 before it resumes its climb and as usual the timing , QE etc are all big factors. But just my opinion.

tatupu70 says

15 years is a long time.

Exactly my point. 15 years is a long time and some of their bonds are for longer duration.