Posting for our resident Markets expert, who is too busy counting CV deaths. NOTE THE LAST PARAGRAPH
""Not only has there been a surge in corporate debt, but the quality of the debt is the weakest it's ever been," said David Rosenberg, chief economist at Rosenberg Research, an investment consulting firm. "The last cycle was about the household sector and commercial banks. This is about the business sector and the holders of the spurious debt are mutual funds, insurance companies and hedge funds."
Some features of today's debt binge look a lot like the last one: Before the virus hit, rising stock and bond prices had fed a complacent belief among investors that asset prices could only go up, much like during the residential housing boom that preceded the 2008 crisis. This complacency has resulted in an increased appetite for risk among hedge funds, mutual funds and insurance companies seeking gains in their portfolios.
Congress and financial regulators have also played a part in the current credit bubble as they did in the last, said Joshua Rosner, principal at Graham-Fisher, an independent research consultancy. In 2018, Congress and financial regulators loosened rules, encouraging investors to raise their borrowings. Rules were also relaxed for residential borrowers during the lead-up to the 2008 crisis."
THIS ALL COMES AFTER ONE OF THE BIGGEST UNNECESSARY CORPORATE TAX CUTS
GUESS THEY DIDN'T USE IT TO PAY DOWN DEBT (JUST LIKE THE US IS ADDING DEBT DURING THE LOWEST RATE ENVIRONMENT IN MODERN HISTORY)
