Corporate self-harm

Corporate balance sheets aren’t in crisis, but if economic trouble comes: watch out. That’s the best interpretation of the deterioration of credit quality reported by debt rating agency S&P. Debt ratings for 16 companies have dropped from investment grade to junk status in the last two months. Only four companies have made the reverse journey. So far in 2006, 32 companies have been junked, compared to 21 de-junkings. The downward trend in ratings doesn’t have much to do with economic weakness. ...