# Professor Emeritus Edward Altman discusses the current state of the credit market

1 Faculty News February 23, 2016 ![CFA Institute blog logo](/sites/default/files/styles/246w/public/assets/images/con_032856.jpg?itok=V-VlUDNY)>

Excerpt from [CFA Institute blog](https://blogs.cfainstitute.org/investor/2016/02/23/the-altman-z-score-in-action-is-a-bubble-building-in-global-credit-markets/) -- "I believe a bubble is building in the credit market today. A bubble is defined as unsustainable prices in an asset class. Most fixed-income products’ prices are limited on the upside to par, so bubble in fixed income is defined by default rate. High yield is my vantage point. A bubble is building when \[the\] default rate goes above \[the\] historical average. It will burst when a two standard deviation year — i.e., a greater than 10% default rate — happens. It has happened five times since 1990, far higher than the two times implied by a normal distribution."

[Read more](https://blogs.cfainstitute.org/investor/2016/02/23/the-altman-z-score-in-action-is-a-bubble-building-in-global-credit-markets/)