Junk-Bond Sellers Desperate for Funding Swallow Yields over 10%

In the 80s, we were borrowing money for mortgages (secured by houses with tenants and 20% downpayments) at rates over 15%.<p>I don’t find yields over 10% given the current economic climate to be unreasonable or evidence of “desperation” on the part of sellers. I would probably find rates of <i>under</i> 10% as evidence of desperation on the part of buyers...

Companies were over-leveraged and didn&#x27;t have cash stockpiles. They&#x27;re trying to get liquid cash so they don&#x27;t have to divest of assets in a market that isn&#x27;t buying or go into chapter 11.<p>All the same, people are willing to extend loans because they are long on the economy, recovery, and return to normalcy. The engines are starting again.<p>The biggest issue was that companies were over-leveraged with debt. Maybe we&#x27;ll learn a lesson from this, although I suspect opportunity cost will prevent many from being more prudent.

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Looks like we&#x27;re setting ourselves up for a junk bond bubble down the road.

Can anybody who understands better than me explain how this links to central banks&#x27; quantitative easing policies and the big macroeconomic picture?

Is this a buy signal for some of these travel or travel related companies I wonder? I can see them having a issue with cashflow now, but its not always going to be like this, people will need rental cars, maybe not as many, but they will need them. Potential consolidation first to reduce capacity and then price rises.

Curious how all of these crazy interest movements will affect the housing market. Deflation sounds bad for housing values, but then again, it means interest rates will stay low, propping up values. And then there&#x27;s the generally-crazy bay area market.

Anybody know how usury laws apply to bonds, especially for sole prop&#x2F;partnerships or personally-secured debt?

This is unsustainable debt levels. It&#x27;s like living on credit cards. These companies and countries should be downsizing.