re: The Lesson of Oil

I've said it on here a couple of times about high yield debt markets. O&G now constitutes about 20% of HY debt (previously, before fracking and Midstream booms, it was in the mid teens).

With a significant portion of these E&P companies levered up substantially, facing a high level of commodity downside exposure due to aggressive approaches to hedging (e.g., 3-way collars with floors well over $60), there is going to be some serious movement in that space.

The effects are going to be far reaching and could put upward pressure on cost of capital for everyone, leading to dovish sentiment at the Fed, translating to further delays in any meaningful pickup in rates in 2015.

Interesting times we live in.