THE Question!

Question from a blog subscriber (this, by the way, is THE question):

"With companies having a big debt load and the economy headed in the wrong direction, will the companies be able to service their debt? What do you see moving forward?"

My reply:

"You're hitting at the true heart of the issue (which will be the topic of my weekly message tomorrow). Companies in the aggregate are carrying record debt loads, with half of all investment grade outstanding at its bottom rung (BBB). Junk is a whole other problem (big one) altogether... So, no, too many companies will not be able to service their debt... The Fed gets this and is more or less freaking out... They're threatening to buy securities outside their current charter; many think stocks, I think low-rated, unserviceable debt is their bigger worry..."