Coronavirus could be the pin to pop the corporate debt bubble

Investors need to beware, says John Stepek. Companies have been loading up on cheap debt, which the coronavirus outbreak could make very difficult to pay back.

Companies have loaded up on cheap debt © Getty
(Image credit: Alexander Spatari)

I’ve just been reading the latest piece from Albert Edwards at Societe Generale. Edwards has a long-running reputation as one of the market’s biggest bears. He’s also stuck stubbornly to his view that bond yields would continue to collapse around the globe, with huge consequences for global financial markets and the economy.

And guess what? He’s been proved absolutely right so far. So what’s he saying now? Brace yourself to be terrified.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.