The Modern History of High Yield Credit Spreads

My chart o’ the day comes to us from this week’s Top Of Mind report from Goldman Sachs. In it, various commentators take a look at the recent widening in credit spreads and discuss what it may mean for the economy and investment markets.

The Goldman people fall into the camp that says what we’re really seeing is being driven by liquidity issues rather than recessionary issues at the moment. An outside commentator they give space to, Edward Altman, Professor of Finance at the Stern School of Business at New York University, disagrees, opining that there is a bubble in corporate credit and its deflating will lead to a credit crisis eventually.

Here’s a look at the modern history of high yield credit spreads for context (click to embiggen!):

Source:

Top Of Mind
Goldman Sachs – March 2nd, 2016