Roses are Red, Covenants are Few

There comes a time when traditional means of communication fail. When other tools must be employed. According to Tuesday’s WSJ, graduates at the University of Glasgow are using haiku to summarize their complex planetary and lunar projects.

These 17-syllable science-related poems, nicknamed “sciku,” make extremely technical topics “more accessible.” Given today’s challenging interplay of elements in the credit markets, we thought our readers might benefit with a “cov-liku” or two.

Let’s first cover noteworthy happenings in the more prosaic world of leveraged lending. Uppermost in investors’ minds has been the Fed’s increasing dovishness on rates, derived seemingly from further signs of a slowing economy.

Analysts are warning of a significant revising downward of fourth quarter 2018 GDP from the reported 2.6% to as low as 1.8%. Add to the mix the government shutdown, which may have been more of drag on 1Q growth than previously thought. That could get us closer to a 2% GDP figure for 2019; not great for equities, but not bad for credit.