Default rate, Howard Marks

Default rate, Howard Marks

The historical default rate might not be relevant to the future. 

In the Global Financial Crisis of 2008 to 2009 and the Covid-19 pandemic of 2020, central banks and national treasuries showed that they’ve developed tools with which to counter recessions and credit crunches.

As a result, the default experiences associated with those events were well below those in the earlier crises, even though the GFC and pandemic were much more serious in a macro sense.

Thus, it can be argued that the macro environment has become safer, meaning the historical spreads are no longer called for.

- Memos from Howard Marks, March 6, 2025

https://youtube.com/shorts/Ws1V4iSWF8I?si=USxUp7rwQUBw7vPg

https://tv.naver.com/v/71077354?playlistNo=949773

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