A Bloomberg article yesterday: Credit Bubble May be Bursting quotes credit analysts sounding concern about the effects of over zealous leverage and its resulting risk in world capital markets at present:
“We are growing extremely negative on credit markets, which we see as in a bubble,” Tim Bond, head of asset allocation at Barclays Capital in London, wrote this week. “U.S. companies are releveraging aggressively in an attempt to substitute earnings-per-share growth for earnings growth. 2008 should see a fairly savage bear market for credit, a large rise in defaults and an end to easy liquidity conditions.”
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