One of the enduring mysteries of human behavior is our perpetual discomfort with the present. Why can’t today be more like yesterday? Yet when tomorrow brings the hoped-for change, we are invariably chagrined. Oscar Wilde captured this tendency when he wrote, “When the gods want to punish you, they answer your prayers.”

Lenders like to secretly root for downturns. Nothing serious, just enough to skim foam off the market latte. It also creates an optimal environment for risk officers to once again rule investment committees. Risk-off becomes an all-purpose directive to turn down deals with aggressive structures or story borrowers.

Well, with 2Q GDP down 0.9%, we are officially in a recession. Until recently risk assets like high-yield bonds enjoyed a Fed back-stop, issuers pounced on low coupons, and investors suffered through low returns. Experienced credit managers looked at the low leverage and attractive spreads of the early 2000’s and asked, Why can’t we go back to those days?