Monday, September 21, 2009

2009 Corporate Debt Issuance Up Over 1,000% From 2005 Levels

How about a short Twitter-ish post since I don't Twitter. I have talked repeatedly over the last two years about the corporate debt bubble. And the fact that corporations across the world are issuing massive new levels of debt since this crisis started. And that debt is not going towards new capital formation in the economy but is instead is being used to "float" the business until a recovery takes hold. It's no different than using credit cards to float your existence when times are tough. Now, some of this is likely because the commercial paper market collapsed but so far in 2009, corporate debt issuance in the U.S. is up over 1,000% from 2005 levels courtesy of just released government statistics. This at a time when large corporations are once again almost universally bullish about the future. Needless to say, that probably makes me almost universally bearish on large corporations.
posted by TimingLogic at 10:01 AM