“The debt market is broadcasting a dangerous message,” writes William Cohan in the New York Times. “Examples of mispriced risk are strewn across the financial landscape.” Quantitative easing supported cheap corporate debt which spurred recovery from the financial crisis, but what’s the mechanism for reverting to the norm? Cohan suggests it could happen through a combination of banks tightening lending standards, investors being more discerning, and regulators exercising vigilance. Or another financial crisis.
