Mother of All Credit Bubbles?

(1) Imaginative bears. (2) Pearlstein’s dire prophecy for the “Buyback Economy.” (3) Credit bubbles tend to be followed by a crisis, then a contagion, and finally a recession-causing credit crunch. (4) Is corporate debt the epicenter of the next economic and financial disaster? (5) Debt ratios look relatively conservative actually. (6) Corporations have extended the maturities of their debt at record-low interest rates. (7) Buybacks + dividends = 100% of after-tax profits. So what? (8) Retained earnings and buybacks are tiny compared to cash flow from tax-sheltered capital consumption allowance. (9) Capital spending looks normal, not abnormally weak. (10) Corporate credits may be junkier, but don’t ignore vultures ready to scoop them up at distressed prices. They may be credit markets’ shock absorbers. (11) Melissa does some fact checking on a few of Pearlstein’s sources.