Credit Markets, How Worried Should We Be?

My colleague Oliver Bergmann who heads up our hedge fund incubation business and I were discussing how the world of credit spiralled so quickly out of control. He sent me the following article by David Merkel who writes a very interesting blog called The Aleph Blog (http://www.alephblog.com). David had analysed this anecdotally and very insightfully in an article on his Blog entitled: What Should The Spread on a Corporate Bond Be? (http://seekingalpha.com/article/67196-what-should-the-spread-on-a-corporate-bond-be). Here is David's article, my response follows...

Hedged: Credit Markets, How Worried Should We Be?