Last charts of the day. The high yield stuff appears to have finally gotten the message on rates.
The old timers used to get very somber when talking about the 1973-1974 equity bear market.
The thing, they said, was that it just kept grinding lower and lower, for 694 days.
By comparison the 2007-2009 decline lasted 517 days, though deeper at a 54% drop in the DJIA versus 45% (43% on a closing basis) for the index in the earlier bear.
On the London Exchange the 73-74 collapse was 73% in the FT 30 and 68.5% for the wider market.
But then there was the inflation.
British inflation rose 10.6% in
1973 and 19.1% in 1974. And although lower, the comparable figures for
the U.S. were the same order of magnitude, 8.7% and 12.3%.
The inflation adjusted declines
were thus just that much worse and among the worst real returns in
history—excluding of course the Berlin Stock Exchange up to 1945 and the
FX market for the shekel/denarius cross in the year 70, what with the
destruction of Jerusalem and the Temple and all.
Anyhoo, all this is prelude to a simple chart, the SPDR Bloombergg Barclays High Yield Bond ETF, symbol JNK:
