The forgotten risk of credit

In his latest memo, Howard Marks examines the recent string of well-publicised credit problems. He considers how they serve as a reminder that the yield premium offered by sub-investment grade credit isn’t a freebie, but rather compensation for bearing credit risk. While good times lead to complacency and elevated risk tolerance, bad times expose the results of that carelessness. Read the full memo for insights on: • Current credit issues • Attitudes towards risk • First Brands’ bankruptcy filing • The conditions that allow financial scams to take place