Corporate debt nears a record $10T, and borrowing binge poses new risks
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.<p>I specifically want to point to this passage from the article:<p>&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.<p>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.&quot;<p>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&#x27;t get the same amount of clicks as fear mongering though.<p>Source: <a href="https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;BAMLC0A4CBBB" rel="nofollow">https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;BAMLC0A4CBBB</a><p>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 &quot;React is evil and everyone who uses it is stupid&quot; is instantly recognized around here as a nonconstructive comment. Rephrasing it as &quot;I like Vue better for reason a, b and c&quot; is much better. Yet when things are finance related, this standard is not upheld.