The Echoes of 2007 Are Starting to Become Louder: Credit Weekly

Massive leveraged buyouts. An ever-growing pile of risky debt. Early signs that subprime consumers are falling behind.

It may not be 2007 all over again, but history is at least rhyming here. Then it was TXU Corp.’s $44 billion LBO, now its Electronic Arts Inc.’s potential $50 billion buyout.Then it was subprime mortgage bonds, now it’s private credit, among other kinds of debt. Then subprime consumers were missing mortgage payments, now they’re falling behindon auto loans.

There are some key differences between now and 2007. Banks are more heavily regulated and have larger ...