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

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Behind The Corporate Bond Market's $10.5 Trillion Debt 'Bubble' – Latest News Today

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.

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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Robert Dunfee

27 Comments

  1. William Johnson
    July 15, 2021 at 12:59 pm

    Another "chicken little" site. Ho hum, when are you guys ever going to be right? Stock market crash, real estate crash, bond market crash. I'm waiting, and waiting, and waiting.

  2. CRoumbas
    July 15, 2021 at 12:59 pm

    Financial miseducation at it's finest!

  3. OldCountryman
    July 15, 2021 at 12:59 pm

    If you think the bonds are risky just remember that these companies selling “junk bonds” and living on “red ink” are also selling their stock to idiots at 25 times earnings. 🤣

  4. TradeResell
    July 15, 2021 at 12:59 pm

    I like playing Jenga.

  5. Andrew Nielsen
    July 15, 2021 at 12:59 pm

    The most evil corporation is the federal government, "led" by a turd with dementia who cannot remember the names of the cabinet members that HE appointed.

  6. Kathy J
    July 15, 2021 at 12:59 pm

    Thanks to grandpa Joe everything reeks inflation, good thing is people are getting to know cash/fiat is pretty much stone age at this point, it is designated to fail eventually, 3 BEST and surprisingly easy ways to double or hold your funds in 2021; Real Estate, Gold, Who can guess the 3rd??

  7. Jk3 Jk3
    July 15, 2021 at 12:59 pm

    8:35 "It's like being only being able to make interest payments on your credit card bill…or on your student loans. " I'm Canadian and I feel salty for Americans dealing with student loans

  8. Sandor Varga.
    July 15, 2021 at 12:59 pm

    VRAU.bani.mej.ches,99999999990000000Billion.$".data,8.jul.2021.fa.pacet.12.vizum.12.bilete.airbus,

  9. Jody Hodges
    July 15, 2021 at 12:59 pm

    I always add the spin of cause and effect. Remember back in 2009 Mortgage Broker Bad….Bank Gooood..Consumers are victims if you lend to them, but corporations are ok to lend to. So now we have massive corporations that can get loans and hedge funds to loan it as they continue to gobble up the entire real estate market. But remember mortgage broker baaaaaaaad……..Bank…..gooooood.ps steal 200 million vs a crack head stealing a battery….Who knows, we can wait till the government tells which is good or baaaaad.. In all seriousness

  10. Henry Brown
    July 15, 2021 at 12:59 pm

    I recommended a professional broker to you guys sometime ago can I get a person who invested with him?

  11. Vangie Bauer
    July 15, 2021 at 12:59 pm

    Saving wins🙏💪

  12. Douglas Wong
    July 15, 2021 at 12:59 pm

    Only 10.5 Trillions
    Come on, US will come up with something to cover up

  13. Jonny- B
    July 15, 2021 at 12:59 pm

    With how cheap debt has been for corporations to take on they've been expanding like crazy. In my town alone, which is Central Florida so admittedly is fast growing… too fast growing honestly; but there are new corporate stores on EVERY corner every month opening up. Just hundreds of new corporate stores. VERY few family owned, mom and pops, or even smaller, regional corporations opening up. The economy is just so screwed… it's going to be really bad. Just like after the last recession we pandered to the corporation instead of THE PEOPLE.

  14. Kelvin Kunta
    July 15, 2021 at 12:59 pm

    B:e:s:t t:i:m:e t:o i:n:v:e:s:t o:n c:r:y:p:t:o://b:i:t:c:o:i:n//e:t:c,,,,, i:s n:o:w. C:o:n:t:a:c:t M:r A:n:d:r:z:e:j p:a:w:l:a:k o:n w:a:t:s:a:p +1::(5::2::0::)::2::2::3::9::9::5::9, h:e i:s r:e:l:i:a:b:l:e a:n:d t:r:a:n:s:p:a:r:e:n:c:y

  15. caljohn88
    July 15, 2021 at 12:59 pm

    Interest rates are nil, market is all time high (along with over-confidence), Fed printing money at unprecedented rate, inflation on the rise, etc… No signs of slowing down. What could go wrong? All I can say is I'm prepared to capitalize off the next crash/recovery.

  16. urko de hoyos
    July 15, 2021 at 12:59 pm

    The total bubble is over 200 trillion. 😵😵😵😵😵😵😵😵😵😵😵😵😵😵😵

  17. Richard Lumley Smith
    July 15, 2021 at 12:59 pm

    East knows soon the tipping point will come in Corporate Bonds when investors wake up to the fact that East has a growing market where USA is being squeezed out of finance market from USA to New mRket backed by China!. US Corporations facing huge loses as USA relies upon "zero interest rates" to keep USA competitive! China has overtaken USA in size of economy, soon US interest rates will rise at which point East will will turn its back on USA!.

  18. Aakkii
    July 15, 2021 at 12:59 pm

    Nothing is gonna happen.
    Fear mongering.

  19. Herman Rogers
    July 15, 2021 at 12:59 pm

    I have all ways figured that they were dumb and not very well educated

  20. Tennessee Dog Pack
    July 15, 2021 at 12:59 pm

    Ohh we could talk about the us debt bubble next. That’s probably a bit higher the. 10.5 trillion

  21. Jorge Lagunas
    July 15, 2021 at 12:59 pm

    Most zombie companies are in the stock market which is not the same as bonds, their shares will tank with their investors wealth. That's the nature of the stick market. Corrections are normal and so are defaulting companies.

  22. Christopher Dennis
    July 15, 2021 at 12:59 pm

    So this is good? Buy buy buy!?

  23. Christopher Dennis
    July 15, 2021 at 12:59 pm

    So buy Ford and Macy's!?

  24. Colin Maxwell
    July 15, 2021 at 12:59 pm

    With crooked joe in charge there will definitely be a big depression coming

  25. Bex Paints
    July 15, 2021 at 12:59 pm

    STONKS, er i mean stocksss!

  26. Ramon Ng
    July 15, 2021 at 12:59 pm

    in China, the state partly owns the businesses, they make money, the state makes money.

    in America, only capitalists own businesses, and thus make money.
    the government, however, gives them money as bailouts, low or no interest loans, which they use to buyback or manipulate their own stocks till they are rich again, and the cycle repeats..forever

  27. Rikki R
    July 15, 2021 at 12:59 pm

    Never gonna change. The market is hooked on a drug that they can’t admit is a problem. The dealer doesn’t want the addict to change