If everyone wants their money back at the same time…

Liquidity issues in the high yield bond market have made front page news today, as expected. I don’t see the current pace of redemptions as something worth freaking out about, but awareness is probably a good idea as spreads widen and redemptions create a drying-up of demand for the $1.6 trillion asset class.

The Wall Street Journal’s got an excellent chart illustrating the phenomenon:

Jim Swanson, chief investment strategist at MFS Investment Management, which oversees about $438 billion, said he has been demanding extra yield on some bonds to reflect the risk that selling could take longer, and avoiding some less-liquid bonds. “There’s a question of what happens when everyone tries to sell [bonds] at once, and I want compensation for that,” he said.

liquidity

 

Source:

Junk-Debt Liquidity Concerns Bring Sales (WSJ)

Read Also:

The Rube Goldberg Machine (TRB)

 

What's been said:

Discussions found on the web
  1. Lloyd commented on Nov 20

    .

    ñïñ.

  2. Martin commented on Dec 16

    .

    ñïàñèáî!

  3. oliver commented on Feb 03

    .

    ñïñ çà èíôó.

  4. ISOfrane commented on Sep 21

    … [Trackback]

    […] There you can find 78978 more Information on that Topic: thereformedbroker.com/2014/08/04/if-everyone-wants-their-money-back-at-the-same-time/ […]

  5. Bitcoin Evolution Review commented on Sep 23

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2014/08/04/if-everyone-wants-their-money-back-at-the-same-time/ […]

  6. 먹튀검증사이트 commented on Sep 25

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2014/08/04/if-everyone-wants-their-money-back-at-the-same-time/ […]

  7. immediate edge review commented on Sep 28

    … [Trackback]

    […] Read More Information here to that Topic: thereformedbroker.com/2014/08/04/if-everyone-wants-their-money-back-at-the-same-time/ […]

  8. bitcoin era review 2020 commented on Sep 28

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2014/08/04/if-everyone-wants-their-money-back-at-the-same-time/ […]