Around the same time, Mellon Bank spun off its bad loans into a "junk bank".
Junk bank loans aren't the only way to buy into risk.
He expects defaults on junk bank loans will peak at an annualized 3% rate near the end of the year, up from around 1% today.
The same forces are at play in the tobacco industry, fossil fuels, junk food, banking, guns, private health provision, in fact throughout public life.
The official said Lowell also "follows a lot of the (Milken) family stuff". Lowell switched to junk bond banking after a promising start as a lawyer.
In the last few years, most firms that specialize in leveraged buyouts -- the use of junk bonds, bank loans and other borrowings to buy or take big stakes in companies -- have been largely inactive.
In the merger mania of the 1980's, Kohlberg Kravis did more than any other firm to popularize the leveraged buyout -- the use of huge amounts of debt, typically a mix of junk bonds, bank loans and a little cash, to buy public companies and take them private.
They are not, we are assured, the same folk who brought the junk into the bank in the first place.
If inequality in Australia is wide and rising today, programs such as quantitative easing and bailouts, i.e. the RBA purchasing junk mortgages from banks at a premium, will further boost inequality.
Rob Zimmerman, the assistant treasurer of Greif Brothers, a maker of industrial containers, for whom Salomon raised $800 million in junk bonds and bank loans, said, "We were thrilled with how they handled our transactions, at a difficult time for them and for the economy".
