Junk bonds have taken a hammering over the last few weeks. 

The reality is that high yield has not been very high yielding of late! The Barclays high yield ETF is sitting at about 5.6%. This is an asset class which is supposed to be inherently risky. People seem to be willing to throw money at risky assets going by that yield!

The real story behind the price drop is simple, people are becoming more risk averse. They don't know it yet but this bull market is over, and the appetite for risk is simply fading away.

This interpretation fits with the idea of a shift in social mood from positive to negative and this shift, will be the driver in this new bear market.

This is just the beginning of the phenomena and it shows up in risky assets first of all. It will move to the general market in time.

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