This is from Porter Stansberry, of Stansberry Research on about 11/12/16.
“I know for certain that this mania is running out of steam. How can I know for sure?
“There are three big “tells”:
“First, total U.S. corporate debt is now 45% of GDP. That’s where the two previous credit cycles peaked (’02 and ’08). … Since 2012, junk-bond issuance has totaled $1.4 trillion in the U.S. alone. That’s as much capital in four years as was issued in the decade between 2002 and 2012. And for the first time ever, global junk-bond issuance has equaled America’s.
“Second, and far more important when it comes to timing, the number of banks in the U.S. that are tightening lending standards is rising and has just passed a critical threshold (10%). Banks tend to tighten lending standards at the same time, at the end of a credit cycle and beginning of a default cycle.
“Third, … not only are banks tightening, but credit downgrades (and) outright default rates have bottomed and continue to grow rapidly. … There are two ways to trigger a panic in the bond markets, not just one. Yes, the first trigger is higher interest rates. … But the second trigger for panic … is simply rising defaults. …