Stress levels in the bond market have reached an all-time low:
The U.S. high yield bond market shows record-low levels of stress (Source: The Daily Shot)
Even with Japanese bonds signaling a finance crisis in global debt… investors in the U.S. “junk bond” market are still making big bets.
The High Yield Bond Distress Index measures levels in the junk bond market, including liquidity, market functionality, and how easily companies can borrow.
A reading this low signals extremely healthy borrowing conditions for high-yield issuers. It’s also where we would look for distress in the corporate AI build out debt issuance.
And if the high yield bond market isn’t worried yet, stock market pullbacks are likely to be short and shallow – and will likely play a role in a midyear “crack-up boom.”
In 2026, we’re still tracking the “Most Terrifying Bull” thesis – the idea that stocks rally on liquidity and capital gains rather than earrings and dividend payouts.
~ Addison
P.S. Grey Swan Live! returns from its holiday hiatus this afternoon at 2 P.M. ET. Our guest this week will be Matt Smith, publisher at Casey Research. Matt and co-author Doug Casey have just released a new book titled “The Preparation.”
Quick hit: Since 2021, Matt has been operating a “regenerative” cattle ranch in Uruguay. The Preparation has some very strong opinions on the value of Western education and how to prepare the next generation to participate in a strong, thriving economy.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
