Corporate and Financial Debt Soar to Pre-crisis Levels

[unhappycamper]

http://www.opednews.com/articles/Corporate-and-Financial-De-by-Mike-Whitney-Banks_Corporate-Profits_Debt_Debt-Monetary-System-130907-335.html



Corporate and Financial Debt Soar to Pre-crisis Levels
OpEdNews Op Eds 9/7/2013 at 12:24:35
By Mike Whitney

There's an excellent article in Thursday's Wall Street Journal that details the ruinous impact of the Fed's monetary policy. While the real economy has seen no benefit from the Central Bank's zero rates and quantitative easing (QE), corporations and financial institutions have gone on a borrowing binge that has boosted their leverage to pre-crisis levels.

Keep in mind, that it was the bursting of the gigantic credit bubble in subprime mortgage-backed securities (MBS) that imploded the global financial system triggering the deepest slump since the Great Depression, so you might think the Fed would want to avoid a similar mishap in the future. Au contraire! As the WSJ article confirms, the Fed's lamebrain monetary policy has returned us to Square 1, the same place we were five years ago when the roof caved in and the whole bloody financial system came crashing down in a heap. Here's an excerpt from the article titled "Financial Crisis Anniversary: For Corporations and Investors, Debt Makes a Comeback":

"'Five years after excessive debt propelled a housing-market collapse into a financial crisis and recession, similar bets are being placed across the U.S"... Leverage is getting back to where it was precrisis,' said Christina Padgett, head of leveraged finance research at Moody's Investors Service.

"Total corporate-bond debt has grown to nearly $6 trillion, up 59% since 2007, the year before the financial crisis. ... Leverage by companies rated investment grade has risen 20% since 2010 ... about 6% higher than in 2008, according to J.P. Morgan Chase JPM -0.48% & Co.

[Demeter]

1. This time, it's different!---the perpetual 1% SLOGAN

That's why the dismissal of science, the shunning of history, the deregulation of regulations that saved our asses for 60 years.....and junk economics and Larry Summers. Also, junk foreign policy, drones, imperial warfare, all the calamity that we've endured since Reagan came in to restore the Nixonian progress to fascism.

[newfie11]

2. Might this be the reason for the rush to war