<story><title>Corporate debt nears a record $10T, and borrowing binge poses new risks</title><url>https://www.washingtonpost.com/business/economy/corporate-debt-nears-a-record-10-trillion-and-borrowing-binge-poses-new-risks/2019/11/29/1f86ba3e-114b-11ea-bf62-eadd5d11f559_story.html</url></story><parent_chain></parent_chain><comment><author>dtwest</author><text>Both the article and the comments here are cringeworthy. I come to HN for the insightful comments, but for some reason, whenever finance is discussed, people do not look at data and start arguing about their feelings. This is a complex topic that requires careful analysis, unfortunately, the Washington Post has not spent the time to do this either.&lt;p&gt;I specifically want to point to this passage from the article:&lt;p&gt;&amp;quot;Last month, in its twice-yearly financial stability report, the Fed warned about the potential consequences of the market’s failure to police the rapid increase in risky corporate debt.&lt;p&gt;During the 2009 crisis, “BBB-rated” companies — the lowest rung of investment-grade — faced borrowing costs almost 7 percentage points higher than higher-quality companies. Today, the difference, or “spread,” is just 1.4 percentage points.&amp;quot;&lt;p&gt;The way this is being framed is very dishonest reporting, 1.4% is close to normal, 7% is the highest it has ever been. A balanced discussion on the matter wouldn&amp;#x27;t get the same amount of clicks as fear mongering though.&lt;p&gt;Source: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;fred.stlouisfed.org&amp;#x2F;series&amp;#x2F;BAMLC0A4CBBB&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;fred.stlouisfed.org&amp;#x2F;series&amp;#x2F;BAMLC0A4CBBB&lt;/a&gt;&lt;p&gt;If you think the financial system is evil or incompetent, please suggest a better way of doing things or go into the specifics about what is wrong. As an example, saying &amp;quot;React is evil and everyone who uses it is stupid&amp;quot; is instantly recognized around here as a nonconstructive comment. Rephrasing it as &amp;quot;I like Vue better for reason a, b and c&amp;quot; is much better. Yet when things are finance related, this standard is not upheld.</text></comment>
<story><title>Corporate debt nears a record $10T, and borrowing binge poses new risks</title><url>https://www.washingtonpost.com/business/economy/corporate-debt-nears-a-record-10-trillion-and-borrowing-binge-poses-new-risks/2019/11/29/1f86ba3e-114b-11ea-bf62-eadd5d11f559_story.html</url></story><parent_chain></parent_chain><comment><author>mrfusion</author><text>Rather than this 10 trillion number I’d prefer to see how much corporate debt has some level of default risk. Presumably some fraction of this is issued by solid companies with Enough cash reserves or future Income to cover the debt.</text></comment>