It’s the Dough, Not the Dow

The oft-quoted baseball legend Yogi Berra once said, “When you come to a fork in the road, take it.” This has been cited as perfectly capturing the futility of some decisions under challenging circumstances. Turns out there was a bit more behind the quote than the Yankee catcher’s famously offbeat wisdom.

According to a 2009 biography, the quote came from actual directions Mr. Berra gave to a visiting friend. His house sits equidistant between two roads. Hence a traveler headed there, upon coming to the fork, can turn either right or left. Either choice leads you successfully to the house.

Read in that light, the mot is even more bon. And for those of us contemplating the world of credit for the coming year, it perhaps highlights ways forward amid otherwise confusing trends and backdrop.

The end of 2018, as we know, saw the unleashing of volatility across public markets. Driven by the Fed’s mixed signals on rate hikes and worries how trade wars might create real drag on economic growth, asset prices tumbled. High-yield bond markets seized up with no new primary issuance in December; the first deal-free month in ten years. Secondary leveraged loan prices fell sharply, while new transactions tailed off and opportunistic re-pricings were shelved.