When we view a tree what we obviously see is that part above ground. But in many trees the roots and tentacles below ground are often longer and cover a wider space than that the tree is tall.
Now that default season in the high yield bond market has been kicked off by Third Avenue, investors need to think about the sector as one of those trees. What's out there that we don't see yet and how deep and wide does it go?
One could argue that those under ground tree roots and tentacles are where the money or gold is. Any poison that manages to get into the tree must come for the most part through them. So the tree can appear healthy from the outside, but what's lurking in those hidden roots and tentacles is the most important question.
On that subject is an interesting read from zerohedge.com.
zerohedge.com/news/2015-12-12/eerie-echo-2007-it-really-bear-stearns-all-over-again
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