A Longstanding Fear About The Corporate Debt Market May Finally Be Coming True
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 23 March 2020
⏱️ 43 minutes
🧾️ Download transcript
Summary
For a long time, people have been warning that corporate debt could be the major source of vulnerability in today's economy. And the market meltdown that we've been seeing since the beginning of March could make those fears a reality. On this week's podcast, we speak with frequent Odd Lots guest Chris White of Viable Markets, on how the extreme search for yield in recent years, combined with massive issuance of debt, combined with the idiosyncrasies of the corporate debt market, could be a setup primed for disaster.
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Transcript
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| 0:00.0 | With Bloomberg you get the story behind the story, the story behind the global birth rate, |
| 0:04.7 | behind your EV batteries environmental impact, behind sand. Yeah, sand, you get context. |
| 0:10.8 | And context changes everything. Go to Bloomberg.com to get context. Hello and I'm Joe Weisenthaw. Joe I'm struggling to another episode of the All Thoughts Podcast. |
| 0:29.0 | I'm Tracy Allaway. |
| 0:30.0 | And I'm Joe Weisenthaw. |
| 0:32.0 | Joe, I'm struggling to think about how to start this episode because there's just so much going on in this particular space, which is the corporate credit market. |
| 0:42.0 | Yeah, I mean, big picture. which is the corporate credit market. |
| 0:55.5 | Yeah, I mean big picture there's a lot going out in corporate credit because there is a lot going on in the market because there is a lot going on in the market because there is a lot going on in the world right now. I feel like if people were to just listen to our last several episodes it would be a great |
| 1:00.4 | trajectory of the world just getting crazier and crazier with each episode. |
| 1:07.0 | Yeah, absolutely and the sell-off in the stock market has been bad enough, but it does feel like what a lot of people are starting to worry about now are these strains that we've seen in credit. |
| 1:20.5 | So we've seen risk premiums on bonds really blow out, derivative indices tied to those |
| 1:28.0 | bonds also going up as people try to get more protection. We've seen some big name companies rushing to tap |
| 1:34.8 | credit lines and try to raise cash before that liquidity dries up. There's just so |
| 1:41.4 | much concern in the market and a lot of it goes back to |
| 1:45.3 | warnings and issues that people have been talking about for years. |
| 1:50.4 | Right, the news that we got yesterday and of course because things are moving so fast, it's always |
| 1:56.8 | worth pointing out when we're recording these episodes. |
| 1:59.7 | We're recording this Thursday, March 12th. |
| 2:02.2 | The news we got yesterday about various private equity |
| 2:05.9 | companies telling their portfolio companies that they should draw on credit lines was kind of one of the real indicators that what |
| 2:17.4 | started off as a health crisis and then sort of became an economic and market |
| 2:22.3 | panic is becoming something that I think is really |
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