An important article from Bloomberg.com today is titled Ratings Ratio Worst Since 2009 as Profits Slow.
Please read it. My recollection is that the late '90s had a similar phenomenon; I remember reading late in the bubble that the business expansion then underway was the first in US history in which the average credit quality of corporations declined.
As the article details, something similar to 2007 is going on now.
This goes along with the effective Fed Funds rate consistently coming in around 10 basis points. Where is the demand for loans with this low a number, which is reminiscent of 2011 numbers?
Now we find yet another downbeat GDP data point from Q1.
As I've been saying, there is a reason why the Fed is doing what it is doing. They are playing their assigned role, and they see the economy up close and personal. In saying this, I'm not expressing an opinion on the entire Keynesian financial structure and philosophy, but I am giving a lot of deference to the Fed's views of the financial underpinnings of economic activity in the US and abroad.
Anyway, the credit cycle for corporations looks to be late-cycle stuff.