Charts, Bruh: CLO Issuances Are Down

In case you’ve missed the past 8 years of 2008 Financial Crisis coverage, one of the causes (or symptoms?) of the financial crisis were Collateralized Loan Obligations (CLO’s). CLOs are a financial instruments (like a stock or bond) that PACKAGE MULTIPLE LOANS TOGETHER and can be traded on an open market. In 2008, as more and more companies defaulted on their loans due to excess lending, heavily traded CLOs that were filled with shitty loans blew the fuck up (defaulted) and various financial companies lost billions of dollars in the process (which meant the average consumers lost billions of dollars). 

Annnddddd following that quick, vague, and not perfect representation of CLOs and their historical relevance…

Peep this chart, bruh:

CLO Issuances.jpg

As you can see in the chart, CLOs were fucking booming in the 2 years leading up to the financial bubble popping like a high-school senior’s cherry on prom night.

What you can also see is that CLO issuances are WAYYYYYY DOWN this year. Hmmmm, what might that mean, you might ask. Well, I’ll tell ya. It looks like investors are starting to become more risk averse to not only illiquid securities (securities that aren’t traded in high volume, aka CLOs) but also credit instruments (debt) in general. This is a kinda sorta maybe a sign of a bear-market / recession economy creeping up on us.

Buckle Up. It’s Gon Get Bumpy.


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