Quote:
Originally Posted by Table 5
This is a totally different kind of beast.
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I disagree. I think it's very similar, with a pandemic layered on top of it.
Corporate debt levels are really over stretched, and the average rating of that debt was not great before the current streak of downgrades.
Valuations were insane before the current crash, and now are roughly back around 2008 peaks. The financial system is arguably in worse health than it was before the previous crash, and we are undergoing a massive, potentially risky experiment in fiscal policy.
Cyclically Adjusted Price to Earnings ratio:
Also, we're hitting a maturity wall for corporate bonds. Note the high ratio of "speculative grade". That was from before the bottom fell out, current data would look much worse. Companies are going to struggle to roll over their debt:
Let's hope the money printer cranked to max saves us.