There is a boom in busts in America — with bankruptcies nearing record levels. The past 18 months have seen some of the country’s biggest bankruptcy filings with the collapse of General Motors, Washington Mutual, Chrysler and Lehman Brothers. Yet since the start of the year, investors have ploughed cash into high-risk, high-yield corporate bonds.

According to AMG, a data provider, there has been a net inflow of more than $11 billion (£6.75m) into so-called high-yield funds this year. In one week last month, the net inflow was close to $1 billion. In Europe, similar statistics are not produced, but high-yield bond analysts say the market has also been booming. The returns have been staggering. European high-yield bonds have produced returns of 47% so far this year. Top-yielding bonds include Taylor Woodrow (now Taylor Wimpey), the housebuilder, whose bonds have generated an amazing 302%.

Investors probably think they are getting a bargain. After all, it is easy to convince yourself that the worst has passed. And it seems the rating agencies are pretty cautious — so there is always a chance that a rock-solid business has been downgraded too far, leaving the opportunity to snap up a fallen star. On balance, however, the high-yield market is headed for a fall. At the end of May, 9.2% of high-yield debt issues had defaulted during the previous 12 months — against only 1% in the boom to December 2007.

Moody’s, the credit-rating agency, predicts the default rate will rise to 13.8% by the fourth quarter. It took more than two decades of boom for the City to rebrand junk bonds as high-yield debt. By the year’s end, investors will remember once again why they earned their original name.

Marston’s

Regional brewer Marston’s has succeeded in winding up some of its shareholders with plans for a rights issue to fund expansion. The £165m fundraising would allow the maker of Pedigree bitter to build a slew of new pubs — but a noisy minority feel such opportunism is misplaced. Given its expansion plans will not enhance earnings in the short term — and nor does it need to refinance its debts — some shareholders will try to vote down the plan.

On balance, the City believes Marston’s will get the green light at a shareholder meeting tomorrow. Amid all the brouhaha over the rights issue, talk of a takeover bid by its great rival Greene King has been getting louder. The shares are up accordingly — they closed at 134p on Friday — 16% up on the week. A tie-up has long been mooted, given the tens of millions of pounds that could be saved. Yet, however compelling the maths, the two companies can barely disguise their contempt for one another.

City sources say that Greene King believes it has done well by concentrating on Scotland and the southeast — it has little interest in buying into its rival’s heartland in the Midlands and the north.

No doubt Greene King covets some of Marston’s estate, but selling off surplus pubs would be impossible in such a difficult investment climate. For now, it would seem that Marston’s isn’t drinking in the last-chance saloon.

jenny.davey@sunday-times.co.uk

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