Chart of the Day - Wednesday, September 22nd, 2021

Today’s Chart of the Day was shared by Dan Russo (@DanRusso_CMT). It's a chart of the CCC High Yield Bond spread over the past 15 years. A Chinese Real Estate firm by the name of Evergrande has been dominating headlines this week, as many speculate whether the company's financial troubles will spill over into the US markets. Some have drawn dramatic comparisons to Lehman Brothers in 2008 and the Long-Term Capital Management implosion in 1998. Terms like "contagion" and "systemic risk" have been tossed around left and right these past few days. If Evergrande were to pose a systemic risk to our financial system, we probably would've seen the credit markets react by now, but as Dan points out, High Yield spreads are hovering near their lowest levels since 2014, indicating no major signs of stress.