The Fed put that underwrote credit since 2008 being functionally suspended while spreads still price it as active is the most expensive assumption in the market right now.
The two economies that one rate problem doesnt resolve cleanly. Cut and you pour fuel on nominal growth that doesnt need it. Hold or hike and you keep grinding the levered 2021 vintage that priced for a world that didnt arrive. The BBB cohort taking the worst total return on duration sensitivity rather than credit quality is the data point that tells you this is a rates story not a credit event. For now.
You mentioned you are closely following Jeld-wen. How are you thinking about that one?
It seems to have some structural issues with rising competitive intensity in US windows and US interior doors. And based on the guide, it would be FCF negative in 2026 even without any leverage. So those two aspects are ugly.
But it does have the sell-able EU assets. And it seems really cheap considering creation EV/EBITDA is ~8x, and that EBITDA is on trough type margins of 3% versus historical in the 7%-10% range.
Thanks. The May CPI is absolutely crucial. Here are my estimates which have been better than Wall Street 70%-75% of the time:
https://arkominaresearch.substack.com/p/may-2026-cpi-estimate
The Fed put that underwrote credit since 2008 being functionally suspended while spreads still price it as active is the most expensive assumption in the market right now.
The two economies that one rate problem doesnt resolve cleanly. Cut and you pour fuel on nominal growth that doesnt need it. Hold or hike and you keep grinding the levered 2021 vintage that priced for a world that didnt arrive. The BBB cohort taking the worst total return on duration sensitivity rather than credit quality is the data point that tells you this is a rates story not a credit event. For now.
You mentioned you are closely following Jeld-wen. How are you thinking about that one?
It seems to have some structural issues with rising competitive intensity in US windows and US interior doors. And based on the guide, it would be FCF negative in 2026 even without any leverage. So those two aspects are ugly.
But it does have the sell-able EU assets. And it seems really cheap considering creation EV/EBITDA is ~8x, and that EBITDA is on trough type margins of 3% versus historical in the 7%-10% range.