Global liquidity is down a massive $1 trillion over the last 10 weeks.

Since the high in 2022, $4.2 trillion in global liquidity has dried up.

We are now back down to pre-pandemic liquidity levels.

After printing and handing out $4 trillion in stimulus while lowering rates to… pic.twitter.com/5EjHi663Ga

— The Kobeissi Letter (@KobeissiLetter) September 11, 2023

Are we at the beginning of a major default cycle?

Since the Fed stated raising rates in March 2022, the US corporate default rate has doubled to ~2%.

US speculative grade default rates are nearing 4%.

However, these rates remain well below 2020, 2008, and 2001 levels.

Markets… pic.twitter.com/L2UiDe1y5G

— The Kobeissi Letter (@KobeissiLetter) September 11, 2023

Policy is slowing other economies via rising debt service costs and a reduction in available financing, but the US has been more resilient. Other banks may need to cut first. This suggests that rate differentials will widen again in the dollar's favor.https://t.co/rAc6yMr9VU

— Joseph Wang (@FedGuy12) September 11, 2023

#Japan 10y yield jumps to 0.71%, the highest since 2014 following hawkish comments from BoJ Governor Kazuo Ueda on negative interest rate policy. Ueda said it’s possible the CenBank will have enough information and data by year-end to judge if wages will continue to rise, a key… pic.twitter.com/do61Y2cCmU

— Holger Zschaepitz (@Schuldensuehner) September 11, 2023

John Law n'a pas chômé. La machine à "enrichir" tourne à plein régime. L'imaginaire financier ne lévite plus, il s'envole! https://t.co/u0VBwn67mC

— bruno bertez (@BrunoBertez) September 10, 2023

Japan is a compelling case study of an economy that has suffered from a prolonged period of monetary and fiscal indiscipline.

The fact that the Bank of Japan has made repeated attempts to alleviate the mounting cost of debt, even with 10-year interest rates at a mere 0.7% is a… pic.twitter.com/doIx1Qzgn9

— Otavio (Tavi) Costa (@TaviCosta) September 12, 2023