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Elephant in Room: Corporate Bond Market Bubble at $10.5 Trillion


Everyone knows it, but few are willing to talk about it too much – for fear of being accused of yelling ‘fire’ in a crowded casino.

The reality is that corporate America is living on vapor.

The world’s largest casino has just upped the ante, again.

If you’re feeling a sense of déjà vu right now, you’d be right.

Welcome to Wall Street…

CNBC reports….

U.S. companies now face the highest levels of debt on record — more than $10.5 trillion, according to the Federal Reserve and the Securities Industry and Financial Markets Association, or SIFMA. The coronavirus pandemic is only part of the story.

The corporate debt market is where companies go to borrow cash. And for over a decade, super-low interest rates left over from the 2008 financial crisis have made borrowing easier and easier. Since then, U.S. companies have regularly offered up bonds for sale, taking advantage of the cheap access to cash. Sometimes companies can get reckless with debt, and this can result in bonds facing downgrades and low ratings, putting those companies at junk bond status. Overborrowing can result in companies becoming “fallen angels” or “zombie” companies. Between rising interest rates and inflation concerns, Wall Street is watching the bond market closely and checking the pulse of the U.S. economy. Here’s how the corporate bond market got to these “bubble” levels and just how risky this massive amount of debt may be to the U.S. economy.  Watch:

READ MORE WALL STREET NEWS AT: 21st Century Wire Wall Street Files

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