Episode summary
No Cockroaches in a Bull Market (Ep. 158)
Facts vs Feelings
· · 51 min · Hosts: Ryan Detrick, Sonu Varghese · Guests: Kate Hall
Summary
The episode argues that the recent “cockroaches” in credit are real, but so far they look idiosyncratic rather than a broad-system warning. Ryan Detrick and Sonu Varghese say traditional credit spreads are still low, even though private credit, leveraged loans, and high yield have all grown dramatically since 2015, pushing more risk into less transparent corners of the market. Kate Hall says her due-diligence work focuses on manager quality, portfolio monitoring, and early-warning indicators like deteriorating interest coverage, rising leverage, and non-accruals.
Key takeaways
- Ryan Detrick says public credit spreads still do not signal widespread stress, with investment-grade spreads in the fifth percentile and high-yield spreads in the ninth percentile of the last 28 years.
- Kate Hall says the private credit market has expanded enough that the usual public-market signals may miss risk hiding in darker corners of finance.
- Kate Hall argues diligence and diversification matter because even good managers can be exposed to one-off frauds or blowups, but hundreds of positions can absorb isolated failures.
- Sonu Varghese says the recent bank and lender problems look more like idiosyncratic underwriting failures than a consumer-wide credit crunch.
- Ryan Detrick says the VIX spike and quick reversal look like another “all clear” signal for a potentially strong fourth quarter.
Notable quotes
“credit spreads remain really really low corporate spreads these are quality corporate spreads uh investment grade that's in the fifth percentile of the last 28 years”
“if the um if the ICRs are going down, the interest coverage ratios are going down, there's probably a problem”
“I don't see any of that today um in our managers”
“I think this is just like lend you had lenders who were probably let's just say too greedy right”
How the episode opens
Welcome to the Facts Versus Feelings podcast. I'm your host Ryan Dietrich and I'm joined by my co-host Sonu Vargis. Cutting through the noise in 30 minutes each week with Ryan Dietrich, chief market strategist and Sona Vargis, VP global macro strategist.
Taking out the boring and helping investors focus on what really matters. A quick note before we start the show. Investment advisory services offered through CWM LLC, an SEC registered investment adviser.
Carson Partners, a division of CWM LLC, is a nationwide partnership of adviserss. Son, were you in Paris the other day? Uh, I don't know.
Should I have been? Oh, I Yeah. Yes.
There were there was I wrote it down here. There were eight No, you don't. You catch it.
Eight priceless jewels stolen in the daytime at 9:30 in the morning at the Louver in France. It took 6:00 to 7 minutes and they haven't found them yet. And there's all Wait, wait, wait.
Did they find one of the pieces of the crown jewel or the crown in a gutter somewhere? Somebody left. So, I was like I thought that's what you were asking me.
Like, were you walking around in Paris and did you find the crown jewels? No, maybe we should go look for them then. These are some bad thieves.
But I was thinking about that like um you know, it sounds straight out of a movie. It literally sounds straight out of a movie. But the idea of like right during daytime, that's when you want to do something like that cuz nobody sees it coming, which is kind of our conversation today.
Episode 158 of Carson's Facts versus Feelings, right in Sonu. We have a special guest coming very, very soon. Uh, no cockroaches in a bull market.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- credit spreads
- private credit growth
- due diligence
- gold momentum
- market sentiment
Companies and tickers mentioned
- Carson Group
Watch the episode
Watch “No Cockroaches in a Bull Market (Ep. 158)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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