Junk Spreads

You got a fast car
Is it fast enough that you can fly away?
You gotta make a decision
Leave tonight or live and die this way
--Tracy Chapman

Junk spreads have been blowing out. Yields on riskiest paper have doubled in the past year and increased more than 200 bips the end of last week.

Widening credit spreads have been harbingers of past equity market declines, as it seems that bondholders catch on to problems quicker than stockholders.

Couple this with other indicators such as deteriorating internals and you have a setting pregnant with high drama.

position in SPX