I haven't mentioned this in a while but I had a run in today with a collection of "
professionals" that scared the living hell out of me and served to reminded me of how obstinate many in the financial space can be: the
historical levels of incremental liquidity currently being injected into the global financial system have forced people to compress credit spreads in order to garner a return.
These compressed spreads then lead to dangerous inferences on existing risk levels. It evolves into a sort of tail-wagging-the-dog effect: do tight corporate credit spreads indicate low levels of risk, or do they evidence that parking spaces for cheap money are becoming as scarce as a tequila-wielding virgin on the second Saturday on Padre Island (which is quite a risky situation indeed)?