Q1 Non-Bank Corporate Debt Surged to a Record $7.3 Trillion. The total [borrowing] at the end of 2007, at the peak of the so-called “credit bubble,” was just $6.7 trillion.
This borrowing spree has pushed overall gearing for nonfarm, nonfinancial corporates to hefty levels. The Fed says that U.S. nonfinancial corporates now have debt equal to 50% of their net worth. It’s near record levels for modern times. As recently as 2006, it was just 40%.
If you watch CNBC or Bloomberg you'll see the talking heads saying how strong corporations are and how much cash they have on their balance sheets, which is somewhat true. But what they never say is how much debt they have, which is now equal to %50 of their entire NET WORTH. Up from just 40% in 2006.
