History of Junk Bond Meltdowns Points to Trouble

Spread between high-yield debt and government securities could be predictive.

Not so happy days.

Photographer: Off/AFP/Getty Images

The rout in junk bonds is intensifying and there's blood in the water. After claiming some high-profile casualties -- notably Third Avenue Management -- the turmoil is raising fears of a larger meltdown in the markets, perhaps even a recession. In other words, is high-yield debt the canary in the credit mine?

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