Evidence that QE is rewriting risk

In between various commentaries on North Korea last night, Bloomberg presented the above chart and wrote: “For the first time ever, bonds issued by junk-rated companies with weaker balance sheets are trading in line with debt from the U.S. government.”  

If you are a visitor from outer space (or better still, a Bot) you might be forgiven for assuming that there is no difference in underlying risk between the US Government and a basket of junk rated corporate borrowers. That’s what the BoAML index chart is saying, right?

Maybe, but I think the chart is telling us that until the ECB tapers and the Fed meaningfully lifts rates (perhaps a bridge too far at present), these and other irrationalities will continue to bubble along. 

What do you think?