America's obsession with the ups and downs of the stock market is obscuring what may be far more important happenings in the debt markets. An enormous borrowing binge is under way in the economy's private sector that may make it surprisingly vulnerable in the months ahead. At a time when the federal government is beginning to pay down its enormous debt, nonfederal borrowings have jumped $1 trillion since 1992, rising from 3.1% of gross domestic product to nearly 13% today. It is no accident that Federal Reserve Chairman Alan Greenspan has given not one but two speeches recently on bank regulation and risk management. While talk of a "bubble" in equities grabs attention, it is debt that may be exploding beyond control (page 40).
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