Why Recession Is Closer Than You Think

Druckenmiller also spoke about the credit crisis, expressing concern that corporate debt has ballooned faster than corporate profits and interest costs. He pegged corporate debt at $6 trillion in 2010 and $10 trillion now, while corporate profits grew from $1.7 trillion to $2.2 trillion cumulatively over eight years on a $4 trillion increase in debt. Additionally, he notes that while debt increased 65%, interest costs only went up 23%. He described this situation as “horrendous productivity of capital.”