The Insight by Oaktree Capital
Conversations: Dissecting the Dual Economy with Armen Panossian and Wayne Dahl
Aug 8, 2024
Join Armen Panossian, Co-CEO and Head of Performing Credit, and Wayne Dahl, Co-Portfolio Manager of Global Credit, as they dive into the widening wealth gap in the U.S. economy. They discuss how luxury markets thrive amid rising delinquencies, the risks in retail sales, and the implications for credit investments. With economic shifts affecting both consumer behaviors and Federal Reserve strategies, discover how careful credit selection can unveil promising investment opportunities despite the challenges ahead.
36:06
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Quick takeaways
- The dual economy's widening gap significantly influences credit markets, as affluent consumers thrive while many struggle with rising delinquencies.
- Despite challenges, disciplined credit selection reveals investment opportunities in non-cyclical sectors and areas abandoned by traditional banks.
Deep dives
The Dual Economy and Credit Markets
The concept of a dual economy highlights the widening gap between affluent consumers and those living paycheck to paycheck, significantly impacting credit markets. In the current environment, investors are experiencing ample liquidity, leading to attractive credit opportunities and a strong equity market. However, growing concerns arise as data indicates a slowdown in consumer performance, evident in rising credit card and car payment delinquencies. The health of the consumer plays a crucial role in overall economic stability, underscoring the importance of monitoring these trends for credit investors.
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