HIGH YIELD SPREADS NOW LOWEST SINCE BEFORE CREDIT CRISIS

Signs of complacency continue to pop up all over the place.  In addition to the continuing market troubles in China, the very high bullish sentiment and the troubles in Europe the bulls just continue to pile head first into high risk assets.  This is perhaps no more apparent than it is in the surge in the Merrill Lynch High Yield Index.  As of yesterday, high yield bonds traded at just under par at 99.47.  The high yield market hasn’t traded at this level since the Summer of 2007 just before the markets began to unravel.