Corporate debt nears a record $10T, and borrowing binge poses new risks
I enjoy the topic of debt but the more time I spend staring at it the more frustrating the framing around it seems.<p>Modern loans don&#x27;t work the way a classic model of lending would suggest. That has implications - loans represent a redistribution of real-world resources away from people who have worked for them and towards people who the banks like.<p>This is a very concerning dynamic given that the 2007-2008 era financial crisis revealed that the bankers are incompetent at assessing risk. They should not be the ones choosing who gets a home or who gets to succeed in business. There is an ongoing trend where people in credit exposed markets (housing, other assets) are raking in unreasonable returns at a lower-than-advertised risk as more and more easy credit is created. It isn&#x27;t fair or clever.