A case in point is US corporate debt, which has changed structurally lately in very scary ways. The short version of the story is that after the US cut interest rates to historically low levels to keep the Great Recession from swapping it’s capital R for a capital D, public companies figured out that they could borrow money for less than their stocks’ dividend yield, use the proceeds to buy back their outstanding shares, and generate free cash flow in the process. And – a nice added perk – the increased demand pushed their share price up and landed their CEOs even bigger year-end bonuses.
So that’s what they did, on an epic scale.
https://www.zerohedge.com/news/2019-02-05/what-blows-first
