by Wolf Richter
“This year is unlike anything ever seen in the history of finance.”
After a historic “debt binge,” leverage levels among the 2,200 largest US corporations, excluding financial institutions, have reached “record highs,” Standard and Poor’s warns. It blamed the Fed-fueled “excessive liquidity and low borrowing costs in the capital markets,” along with declining profits.
Now these companies, and “particularly those at the lower end of the credit spectrum,” of which there are more and more, “are as vulnerable to downgrades and defaults as they were in the period leading up to the Great Recession – and perhaps more so.”