"The IMF estimates that half of corporate debt – excluding small businesses – is high risk, or junk rated...What makes the situation even worse is that $660 billion of companies’ so-called leveraged debt is held in collateralized loan obligations (late: just like the economic crisis a decade ago) the slightest interest rate move in the wrong direction has the potential to transform debt into junk worth pennies on the dollar...
This is why the Fed has no choice but to keep lowering interest rates and keep them there. The gamble is that companies will use the breathing space to get their houses in order."
Sorry, but that isn't going to happen without a robust regulatory authority. Something we should have done the last time, and didn't.https://theconversation.com/why-the-fed ... sis-126096
“Those who can make you believe absurdities, can make you commit atrocities.” - Voltaire