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10 years of Lehman Brothers: Why corporate debt might spark the next crisis

"Covenant-lite" deals are booming among leveraged loans, a sort of subprime debt often employed in corporate acquisitions

Lehman Brothers
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Lehman Brothers had hoped to sell off a stake in its investment unit to raise capital and use the funds to take care of some of its toxic assets, with possible asset sales by September 10, 2008. But investors weren't convinced and the shares continue

Mark Whitehouse | Bloomberg Opinion
Now that everything has been said about the 10th anniversary of the Lehman Brothers bankruptcy, it’s worth asking how close we are to the next crisis. In the market for corporate loans, investors have fulfilled at least one prerequisite: They’re dropping their guard.

The financial cycle has a lot to do with inattention. When something bad happens, people are careful for a while. Then if all is fine for long enough, they forget that bad things can happen. This false sense of security leads to precisely the kind of behavior that precipitates the next crash.

The corporate debt market has

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