The Wolf Street Report: "Will Corporate Debt Trigger a Financial Crisis?"

Wolf Richter  ( Original )
NOV 27, 2018

In 2008, $10T in mortgage debt kicked off The Great Recession and a meltdown of US and global capital markets that threatened to capsize the global economy.

Today, $32T in corporate debt, most of it already rated junk or one notch away, has kept many companies on life support, barely clinging to existence despite a 10-year bull market in stocks and an unprecedented run of 'Goldilocks' conditions in the American economy.

What happens when this government stops propping up all assets classes and raises interest rates, and ceases to hand out unaffordable corporate tax cuts while the Fed shrinks its balance sheet and the inevitable downside of a decade of insane fiscal recklessness draws to a close?