Home » Behind The Corporate Bond Market's $10.5 Trillion Debt 'Bubble' financial news

Behind The Corporate Bond Market's $10.5 Trillion Debt 'Bubble' financial news

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U.S. companies now face the highest levels of debt on record — more than $10.5 trillion, according to the Federal Reserve and the Securities Industry and Financial Markets Association, or SIFMA.

The coronavirus pandemic is only part of the story.

The corporate debt market is where companies go to borrow cash. And for over a decade, super-low interest rates left over from the 2008 financial crisis have made borrowing easier and easier. Since then, U.S. companies have regularly offered up bonds for sale, taking advantage of the cheap access to cash.

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Sometimes companies can get reckless with debt, and this can result in bonds facing downgrades and low ratings, putting those companies at junk bond status. Overborrowing can result in companies becoming “fallen angels” or “zombie” companies.

Between rising interest rates and inflation concerns, Wall Street is watching the bond market closely and checking the pulse of the U.S. economy.

Here’s how the corporate bond market got to these “bubble” levels and just how risky this massive amount of debt may be to the U.S. economy.

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Behind The Corporate Bond Market’s $10.5 Trillion Debt ‘Bubble’ .

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17 comments

Jive Patrol 23/09/2021 - 12:48 AM

It's going to be a "blow up". Had the Fed not back stopped the whole junk bond market in March 2020, the S&P 500 would be at 800 right now. They are trying to "hold back Hoover Dam" and just delaying the inevitable. Let these companies default and let people go broke. Clear out the excesses and start rewarding savers and people/companies with clean balance sheets.

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Filthywings 23/09/2021 - 12:48 AM

Wait wait wait.

Bonds only make up a part of the 10 trillion corporate debt, the video never states how much of that debt is due to bonds. Also it doesn’t state if corporate bonds have fixed or adjustable rates.

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Jeffrey Gillespie 23/09/2021 - 12:48 AM

Honestly, if you're worried about the BOND market, just stay in cash. You literally have insufficient risk appetite to be in the markets.

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Williams Ava 23/09/2021 - 12:48 AM

I was experiencing lapses in putting enough work into trading,and my job made it nearly impossible for me to earn. Until I came across Charlotte Anderson , turned my life around, I'm so grateful?

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Arindom Baidya 23/09/2021 - 12:48 AM

US Govt = Zombie Company. Interest rates goes up, the government collapses

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mrPmj00 23/09/2021 - 12:48 AM

.,.,.AMAZON:
Yep, I bought a ton on the dip.

Amazon invested $14 billion in the last quarter alone, the same as it spent in 6 months before that. It is a do not sell stock.

…With the Delta virus coming at full speed ahead, pandemic sales will make a comeback.

Amazon is investing so much money, that no competitor will ever be able to catch up.

Amazon's not going anywhere so I know that eventually it will come back.
Fidelity considers Amazon as a large growth company (probably because as big as it is, it still only has 7% of the retail market)

Get on board or be runover, it's up to you.

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JustKeith 23/09/2021 - 12:48 AM

Another thing, the common person can't comprehend how big a trillion is. I am beginning to think no one does.

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JustKeith 23/09/2021 - 12:48 AM

They claim the economy is doing great right now. (2021) But yet debt is still skyrocketing. So if we are not paying off debt now, when times are "good" then WHEN are we going to stop this runaway train? Let me tell you that it won't be because governments get responsible and tighten their belts.

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Pradeep G R 23/09/2021 - 12:48 AM

Arbnab busness

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Ichigo Kurosaki 23/09/2021 - 12:48 AM

Don’t forget about the municipal debt bubble….

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The Seeker 23/09/2021 - 12:48 AM

#endthefed
cbdc is slavery

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John Dyer 23/09/2021 - 12:48 AM

So if bonds are part of your investments that must mean at some level companies borrow from you and pay you for the use of your money. That's totally cool. So the more you invest the more you build wealth. Sweet.

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Brett S. 23/09/2021 - 12:48 AM

God damn Wall Street. Never fails that the corporate fatcats will find a way to screw the entire world economy one way or another knowing that they won't be the ones who end up paying for it at all or hurting from the fallout. This country blows!

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Bill Jane 23/09/2021 - 12:48 AM

ITS ALL THE TYPICAL US GREED.
Companies are borrowing huge amounts of money to then give to shareholders as dividends or buy back shares to increase share price and improve dividend.
Share holders dont care as long as it looks OK and are quite happy to see the company destroyed over the progress term.

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Moribund Murdoch 23/09/2021 - 12:48 AM

Let the companies fail.

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Cinema Ipswich 23/09/2021 - 12:48 AM

If they take on debt to buy back their shares, or pay shareholders before creditors and bond holders, or take on debt at all, don't trust them.

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Tommy Lee 23/09/2021 - 12:48 AM

Dude I got my own debt. I don’t just tax people and spend it like crazy. I work for my money

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