Junk will live up to its name

Junk bond issuance is soaring while commercial (business loans) and real estate loans, both residential and commercial, are aggressively contracting. When something doesn't add up, it's not long before one side of the trade gets hurt.

Break Down of Total Bank Credit: Year-over-Year Change for Total Loans, Business Loans, Real Estate Loans, Home Equity Loans, Consumer Loans, and Cash Assets for Commercial Banks in the US.

Junk bond borrowers have raised US$168.5 billion in the year to September 15, according to Dealogic, surpassing the full-year record of $163.6 billion. Since that high was set in 2009, you can see that junk bond issuance is running far ahead of all previous levels, extraordinary in the deepest recession since World War II.

Source: atimes.com

From Bob