, Columnist
Looking for Credit Bubbles in All Wrong Places
The danger in the riskiest bonds is well known. Keep an eye on debt perceived as more creditworthy.
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Living in a bubble is great. You’re safe and comfortable and able to ignore imminent danger. The problem is it never lasts. Eventually your protective shield pops and bad stuff comes flooding in.
UBS analysts said Monday that there’s a bubble in the lowest-rated corporate bond values. That seems fair given the growing amount of distress in U.S. credit markets, but it’s hard to say that many of those investing in the riskiest U.S. credit right now feels particularly safe.