Investors did not want "Junk Bonds" in 2009 when rates reached 24%. Now, just five short years later, these same investors are buying all they can at rates around 5%. They are completely ignoring the inherit financial risk in these types of investments. It is all about reaching for yield at the risk of ever getting their principal back. But, I know it is different this time! Right? Complacency is all the place, simply look at the major disconnect between the stock market and the economy. Yesterday, the GDP for the first quarter came in at a negative 2.9%. What did the stock market do? Oh, of course, it was up. The rationale put forth by the pundits was that the GDP for the first quarter would have been positive, if it was not due to the snow. Did you read that? Snow caused the decline in GDP. Like, we have never had snow before in the winter.
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