Zombies Feeding At The Fed’s Cheap Money Trough

The toxic spawn of the Fed’s pro-inflation money-pumping is omnipresent. Today’s Wall Street Journal heralded still another case, reminding us once again where the thousands of corporate zombies now barnacling the main street economy get their financial feed:

Investors’ headlong embrace of risk passed a new milestone in recent sessions: The return that investors receive for investing in the riskiest U.S. companies fell below inflation.

Yes it did, and that’s saying something. After all, the historic yield spread over inflation of these risky securities has ranged between 500 and 1000 basis points or more. And for the good reason that in combination inflation and defaults always eat deeply into the coupons so as to remind investors why it is called junk.

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