“In a solvency crisis, companies can’t survive no matter how much they can borrow: they need more revenue. The Fed can’t solve that.” —Greg Ip, @WSJ

Is the economy facing a liquidity crisis, or a solvency crisis? The distinction will determine how important the Federal Reserve is to returning the economy to health.

In a liquidity crisis, otherwise healthy firms collapse because they can’t access credit. The Fed can resolve such a crisis because it can print and lend unlimited amounts of money. In a solvency crisis, companies can’t survive no matter how much they can borrow: they need more revenue. The Fed can’t solve that.

Deluge of Debt Is Making Corporate America Riskier for Investors

Blue-chip U.S. companies are borrowing money at a record pace to make up for their plunging sales. That process is making corporate bonds riskier for investors.Boeing Co., the plane maker, sold $25 billion of bonds on Thursday, the largest offering of the year. Coca-Cola Co. issued $6.5

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CLOs Risk Starring Role in This Recession When Default Wave Hits

Michael Lewis’s “The Big Short” told the story of CDOs, now infamous debt securities that played a starring role in the last financial crisis. This time around their cousins could be thrust center stage.