The debt markets these days are being described in nearly apocalyptic terms. We’re in a meltdown! It’s a long freeze! It’s sending us an ominous warning!
The hand-wringing started with the news that for the first time in years, not a single American company successfully issued a high-yield bond during December. In other words, companies with poor credit that wanted to borrow money by issuing public bonds couldn’t find anyone willing to take the risk on them. (A pipeline company broke the dry spell on Jan. 10.)
At the same time, an index that tracks the price of leveraged loans — made by big banks to companies with a fair amount of debt already — noted that the average price of such risky loans had fallen more than 3 percent in one month to around 94 cents on the dollar, the largest one-month decline since August 2011. By contrast, last summer investors in leveraged loans couldn’t gobble them up fast enough and were willing to pay much higher prices and accept lower yields, which reflect the interest paid by the borrowing companies. “The market just continues to weaken,” a high-yield bond trader told The Financial Times.
Actually, quite the opposite is true. The debt markets are undergoing a healthy and much-needed correction that is slowly eliminating a decade of reckless euphoria. Soon after the 2008 financial crisis began, the Federal Reserve instituted a policy of forcing down interest rates to historically low levels. The “zero interest rate policy,” which continued until December 2015, revived the moribund American economy. But when debt is really cheap, borrowers load up on it, to a fault. Even blue-chip companies such at AT&T and G.E. have gorged on the cheap money to acquire other companies, pay dividends or buy back stock. (AT&T has said it is generating enough cash to “manage its obligations.” G.E. says it has plenty of assets and available credit.)
Smart investors are now turning the tables. For issuers of risky debt securities, the past few months have been very difficult. They haven’t been able to sell new debt at the low interest rates they have been enjoying for nearly a decade. For a hypothetical company issuing billion of high-yield debt, the annual interest expense would be million higher today than it was two and a half years ago.
What’s bad news for issuers of high-yield debt is good news for investors, who are finally waking up to the fact that they have been taking risks on companies with poor credit quality for years without being properly compensated. They are no longer so willing to take on that risk. That’s in large part why there was no high-yield debt issued in December and why leveraged loans have been trading down. It’s a sign of a healthy debt market, not of a damaged one.
Sadly, all sorts of people get addicted to the euphoria of low interest rates. There are hedge fund managers, private-equity moguls and big banks that have been using the debt markets to borrow money extremely cheaply. They have been raking in the profits in recent years, in part by piling too much debt onto companies and then paying themselves a huge dividend with the proceeds of the debt offerings.
Politicians, too, seem to get hypnotized by the perceived benefits of low interest rates. President Trump has been publicly criticizing Jerome Powell, the chairman of the Federal Reserve, who has been carefully ending the era of super-low interest rates in a measured and responsible way, with small rate increases that have so far caused minimal disruption to the economy, although the perceived pace of the increases seemed to rattle investors late last year.
After the fifth straight quarterly rate increase, Mr. Trump, worried that the hikes might slow growth or even tip the economy into recession, complained that Mr. Powell would “turn me into Hoover.” On Jan. 3, the president of the Federal Reserve Bank of Dallas said the Fed should assess the economic outlook before raising short-term interest rates again, a signal that the Fed has hit pause on the rate hikes. Even Mr. Powell has signaled he may be turning more cautious.
While this new sobriety in the bond market is healthy, it doesn’t mean the companies that gorged on debt can avoid the consequences. Their debts aren’t disappearing, and it could be even harder for them to refinance existing debt or to issue new debt. That could spell trouble for the economy down the road. If, for example, either AT&T or G.E. were to default on their heavy debt loads, there would be considerable fallout in the economy as a whole.
Anyone worried about the health of the American economy should welcome this renewed investor vigilance as a sign of much-needed discipline. Sixty-three years ago, William McChesney Martin, the longest-serving chairman of the Federal Reserve, described the job of the Fed as that of the “chaperone who has ordered the punch bowl removed just when the party was really warming up.” To be willing, in other words, to raise interest rates to rein in investor exuberance. Follow the advice of your admired predecessor, Mr. Powell, and take that punch bowl away.
William D. Cohan is a special correspondent for Vanity Fair and the author of, most recently, “Why Wall Street Matters.”
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【等】【莱】【斯】【知】【道】【的】【时】【候】，【苏】【糖】【已】【经】【在】【醉】【生】【梦】【死】【了】，【当】【然】，【希】【尔】【怕】【她】【玩】【脱】【了】，【还】【是】【非】【常】【尽】【责】【地】【在】【一】【旁】【盯】【着】。 【毕】【竟】【这】【位】【要】【是】【出】【事】【了】，【他】【也】【不】【用】【活】【着】【回】【去】【了】。 【不】【过】【希】【尔】【发】【现】，【这】【位】【是】【真】【的】【能】【玩】，【这】【种】【地】【方】【都】【能】【玩】【出】【这】【么】【多】【花】【样】，【佩】【服】，【真】【的】【是】【非】【常】【佩】【服】【了】。 【角】【斗】【场】【发】【生】【的】【事】【在】【北】【域】【称】【得】【上】【是】【大】【事】，【所】【以】【苏】【糖】【带】【着】【希】【尔】【前】
【这】【座】【城】【池】【极】【为】【宏】【大】，【城】【墙】【的】【厚】【重】【和】【高】【大】【程】【度】，【堪】【比】【当】【年】【的】【皇】【台】【堡】。 【而】【且】【整】【个】【城】【市】【有】【三】【层】【城】【墙】，【最】【里】【面】【的】【一】【层】【被】【称】【为】“【内】【堡】”，【是】【真】【正】【的】【权】【贵】【居】【住】【的】【地】【方】，【越】【往】【外】，【居】【民】【越】【穷】【越】【弱】【小】。 【如】【果】【沉】【默】【魔】【山】【中】【形】【成】【了】【兽】【潮】，【冲】【破】【了】【城】【墙】，【最】【先】【倒】【霉】【的】【就】【是】【这】【些】【城】【市】【底】【层】【的】【居】【民】。 【苏】【云】【姬】【留】【下】【的】【两】【名】【猎】【兽】【战】【士】，【都】【是】【灭】
【系】【统】【发】【生】【全】【新】【的】【变】【化】，【原】【本】【白】【茫】【茫】【的】【空】【间】【变】【成】【了】【天】【蓝】【色】【的】【房】【间】，【一】【张】【舒】【适】【天】【蓝】【色】【小】【床】【和】【一】【个】【白】【色】【的】【床】【柜】，【虽】【然】【十】【分】【简】【单】，【但】【是】【比】【之】【前】【好】【太】【多】【了】。 【一】【个】【透】【明】【的】【古】【言】【小】【格】【格】【出】【现】【了】，【她】【慢】【慢】【地】【睁】【开】【双】【眼】，【看】【到】【了】【宿】【主】，【十】【分】【高】【兴】。 【【宿】【主】，【人】【家】【升】【级】【完】【毕】，【重】【新】【扫】【描】【宿】【主】【的】【亲】【和】【力】。】 【长】【袖】【一】【挥】，【一】【个】【投】【影】【表】【出】黄大仙心水论“【我】【知】【道】，【这】【个】【事】【不】【用】【你】【说】，【而】【且】【我】【也】【从】【来】【没】【和】JOKER【合】【作】【过】【贩】【卖】【人】【口】【的】【事】【情】，【我】【只】【是】【和】【他】【合】【作】【一】【些】【违】【禁】【品】，****【这】【些】【东】【西】。”【一】【听】【到】【兰】【博】【就】【要】【揭】【开】【伤】【疤】，【泰】【佐】【洛】【直】【接】【打】【断】【道】。 “【不】【错】，【你】【还】【有】【救】，【至】【少】【你】【还】【留】【着】【一】【丝】【底】【线】。【对】【了】【泰】【佐】【洛】，【你】【想】【不】【想】【报】【仇】？” “【报】【仇】？【我】【每】【时】【每】【刻】【都】【想】【着】【报】【仇】，【每】【次】【想】
【安】【思】【瑶】【一】【愣】，【指】【着】【自】【己】【道】：“【我】【吗】？” “【对】，【就】【我】【和】【你】。” 【向】【崇】【烨】【眉】【峰】【微】【拧】，【下】【意】【识】【的】【往】【前】【走】【了】【一】【步】，【将】【安】【思】【瑶】【拦】【在】【身】【后】，【一】【脸】【防】【备】【的】【盯】【着】【廖】【云】【菲】。 【廖】【云】【菲】【看】【出】【了】【他】【对】【自】【己】【的】【防】【备】，【眸】【光】【微】【凛】，【却】【没】【有】【退】【让】。 【安】【思】【瑶】【见】【状】【忙】【主】【动】【握】【了】【握】【向】【崇】【烨】【的】【手】，【低】【声】【道】：“【没】【事】，【就】【一】【会】【功】【夫】，【你】【到】【车】【里】【等】【我】。”
【对】【于】【几】【间】【铺】【子】【的】【安】【排】，【沈】【嫣】【菡】【做】【了】【详】【细】【的】【规】【划】，【只】【等】【着】【和】【几】【个】【掌】【柜】【再】【商】【量】【一】【下】，【这】【些】【孩】【子】，【就】【安】【排】【在】【铺】【子】【里】【做】【活】。 【沈】【嫣】【菡】【对】【自】【己】【的】【将】【来】，【还】【没】【有】【规】【划】，【总】【之】，【先】【找】【回】【丢】【失】【的】【一】【魂】【两】【魄】【再】【说】。 【至】【于】【她】【和】【郝】【连】【策】…… 【看】【向】【门】【外】。 【郝】【连】【策】【正】【蹲】【在】【地】【上】【捣】【鼓】【薄】【荷】。 【沈】【嫣】【菡】【喜】【欢】【薄】【荷】【茶】。 【至】【少】【本】【尊】【是】【喜】【欢】
【洛】【清】【丰】【不】【紧】【不】【慢】【说】【道】：“【我】【可】【是】【学】【生】【会】【的】，【说】【看】【一】【个】【女】【生】，【寝】【室】【长】【就】【让】【我】【上】【来】【了】！” 【果】【然】【是】【有】【面】【子】【好】【办】【事】。 【寝】【室】【里】【的】【女】【生】【看】【到】【了】【林】【琛】，【又】【看】【到】【了】【洛】【清】【丰】，【好】【奇】【心】【更】【加】【重】【了】。 【都】【不】【知】【道】【自】【己】【该】【说】【些】【什】【么】【才】【好】【了】！ 【反】【正】【那】【种】【感】【觉】【确】【实】【是】【让】【人】【有】【些】【难】【以】【形】【容】。 【真】【是】【不】【知】【道】【该】【让】【人】【说】【些】【什】【么】【才】【好】，【反】【正】【就】【是】