from Zero Hedge
“cumulative losses over the length of the entire cycle could be worse than we’ve ever seen before” – BofA High Yield strategist Michael Contopoulos
While not as quixotic as Morgan Stanley’s Adam Parker piece on market-chasing cockroaches, BofA high yield analyst Michael Contopoulos has moved beyond merely bearish and is now outright catastrophic . That may be a little far fetched, but in his latest note – while he doesn’t call rally chasers “cockroaches” (yet), he seems at a loss to explain the ongoing junk bond rally. His reasoning: fundamentals just keep getting worse by the day, while price action has completely disconnected from reality, and virtually nobody expects what is about to unfold in the junk bond space.
First, according to his assessment of deteriorating macro and micro indicators, the recent price move makes little sense: