Companies are failing fast. Lending to them has never been cheaper.

You've seen it.

The store with paper taped over the windows. Open last month. Dark now, with a printed notice on the glass and a phone number to call.

Someone's whole business, gone.

This year that scene is playing out faster than it has in a long time. In the first six months of 2026, 372 large American companies filed for bankruptcy. That's the most for any first half since 2010, back when we were still climbing out of the last crisis.

Small businesses had it worse. 1,663 of them filed in the same six months. Up 50% from a year ago.

So the default cycle isn't coming. It's here.

Then I looked at the bond market. And the price of that risk has almost disappeared.

When you lend to a shaky company, you get paid extra over what the government pays. That extra is your reward for the chance the company folds. Right now the reward is about 2.7 percentage points. The 20-year average is close to 5.

So companies are failing at the fastest pace since 2010… and lenders are charging the least in years to fund the risky ones.

Those two things don't belong together.

When failures climb, that reward is supposed to climb with them. Lenders get nervous. They ask for more. That's the entire point of the number.

This time it's dropping instead.

When failures pile up and the price of risk keeps falling, someone is being told there's nothing to worry about. I want to know who's telling them that.

So this week I followed the money into the corner where companies actually die. The bankruptcy courts. Then I looked at what lenders are charging right next door, as if none of it were happening.

The bankruptcy story doesn't begin with famous names. It begins on the corner.

In the first half of 2026, small-business filings under the fast-track Subchapter V process reached 1,663. That's up about 50% from a year ago.

Commercial Chapter 11 filings, where a business tries to reorganize instead of close, rose 28% to 4,589. Total commercial filings climbed 13%.

These are restaurants and clinics, small manufacturers, trucking outfits. They fail first because they carry the least cushion and pay the highest rates.

They don't make the news one at a time. But they add up. And right now they're adding up fast.

And here's where it spreads.

If failures are climbing, why is the price of risk falling? Because there's too much money chasing it.

Distressed-debt funds and private-credit firms are sitting on record piles of cash raised to buy exactly this kind of trouble. When a company files, they don't flinch. They show up with open checkbooks and treat the wreckage as a sale.

You can see it in the insurance. The cost to insure a basket of junk-rated debt fell from 406 in March to 304 by the end of June. It fell while the filings rose.

The failures are happening. The fear isn't.

So much money is reaching for yield that it soaks up the losses before fear can ever price in. That's the machine holding the reward for risk down near a record low.

Meanwhile, the strangest part is the backdrop.

A failure count this high normally shows up in one place: a recession, or the wreckage right after one. That's where 2010 sat.

But the economy grew 2.1% in the first quarter. There is no recession. Not yet.

And it isn't one sick industry dragging the number up. Industrials led with 50 filings in the first half. Consumer companies added 35. Healthcare, 26. The failures reach across the whole map.

A broad wave of companies is dying while the economy, on paper, keeps growing. The credit market has decided the first part doesn't matter. That's the tell.

Three more things worth keeping track of…

Platinum ran about 127% in 2025 and touched roughly $2,878 an ounce in January, its highest in around fifteen years, before settling near $2,000. Last year's shortage was the deepest on record. The South African mines that dig up most of the world's platinum now produce about a quarter less than they did in 2006, even with prices this high. High prices are supposed to pull more metal out of the ground. Here, they haven't.

Britain now pays about 5.8% to borrow for thirty years, the most since 1998. The buyer that used to absorb all that long-dated debt, the country's own pension funds, has turned into a seller as it winds down old hedges. So the government keeps issuing bonds and its most reliable customer keeps walking away. That gap gets filled by someone, at some price.

The top tenth of American earners now account for close to half of all consumer spending, the highest share since the records began in 1989, on the most-cited estimate. Their spending rides on stock prices and home values. Everyone else has barely grown their spending past inflation in years. So the economy leans harder and harder on a small group whose confidence lives inside the market. We'll see.

In June 2007, junk debt had never been cheaper to lend against.

The reward for holding a risky company's bond fell to 241 basis points. About 2.4 cents on the dollar, a year, for the chance it all went wrong. It was the lowest the index had ever printed. It still is.

The economy looked fine. Jobs were there. Stocks sat near highs. Everyone agreed the good times would hold.

So lenders lined up to lend for almost nothing.

The tightest the market ever got came right before the worst it ever got.

Then the summer turned. Two funds at Bear Stearns went under. The mortgage bonds no one had worried about started to fall.

By that November the reward for risk had doubled. By the next winter it had passed 2,000 basis points.

That's not a typo. From 241 to more than 2,000.

The junk market shut. No new bonds sold for months. More than one company in eight defaulted. Bear Stearns was gone. Then Lehman. Then Merrill. Then AIG needed the government to survive.

The number that warned you wasn't off in some obscure corner. It was the most-watched number in all of credit. It just said the opposite of the truth.

When the price of risk falls to a record low, it doesn't mean the risk is gone. It means no one is being paid to look for it.

I don't know when this one turns. Nobody does.

But I know what it looked like the last time lenders agreed there was nothing to fear.

It looked cheap. Right up until it didn't.

We'll see.