The fact is, there’s now around $3 trillion of bonds rated BBB, the lowest rating bracket above junk. How much of this debt – like General Electric bonds – should be rated junk that isn’t? We suspect the next liquidity event will clarify the answer to this question.
The real question, however, is how did $3 trillion of questionable debt pile up to such a perilous level to begin with? What follows is an attempt at an answer