A contagion of global and potentially epic proportions is becoming more deeply embedded with each passing day. And the impact from this epidemic is both far and wide with a meaningful influence on global politics, acts of war and even financial markets. What is this global dilemma? It is the increasing realization that we are seemingly living in a world without consequences. Global actors with considerable weight, some of which have dubious objectives to say the least, are able to move freely without accountability. Moreover, these actors are likely feeling increasingly emboldened by the fact that each unthinkably controversial line crossed is apparently met with little to no response other than equivocation from those that are charged with the responsibility of maintaining order and formulating a response. While trying to ignore and delay dealing with the major geopolitical and financial problems besetting the world today may continue to provide the
By Rick Harper
The demand for high income amid concerns about rising rates has generated significant interest in exchange-traded funds offering exposure to senior loans. Senior loans, also commonly known as bank loans or leveraged loans, typically pay interest rates based on a spread above a short-term interest rate such as the London Interbank Offered Rate (LIBOR). Should rates rise, investor income payments should increase along with LIBOR. Since these loans are made to issuers of lower credit quality, senior loans provide high levels of income potential.
However, risks may be increasing in the leveraged loan market. After a period of 95 straight weeks of inflows totaling $66.3 billion in assets, these strategies have recently seen the largest amount of outflows in nearly three years (-$1.2 billion). At the same time, supply is continuing to increase at its fastest pace since 2007. In 2013, underwriting and syndication of loans topped