A long time ago when I was building a fintech product, a resume came across my desk and it had a certain gravitas that I couldn’t quite put my finger on.

Phillips Exeter Academy. Princeton Crew team. Double Major: Politics & Math. 2 years at Goldman Sachs. Now: HY Credit Trader at Barclays.

HY Credit Trading. I knew what all the other accomplishments were, but what’s HY credit trading?

It sounds really prestigious. I know a little bit about finance and economics, but I’m far from an expert. I did a little bit of googling, and soon found out that HY stands for High Yield.

Nice, so this guy is a High Yield credit trader. Must be because he’s a natural born winner. A go-getter. Besides, it’s not like he’s trading low yield credit or something inferior like that. Who would want to trade that?

I was about to go on my way until I remembered something that’s almost always true in life and always true in finance: if it sounds too good to be true, it probably is.

So I thought through it a little bit more.

High Yield credit means that the person who owes the debt obligation on the other side is probably paying a lot to borrow the money. Makes sense so far. Where else would those high yields come from? Not like it’s desirable to pay back a loan obligation where the interest cost is high.

So if someone is paying a lot to borrow money, there’s probably a reason why. Capital is a commodity and interest rates are basically zero. You’d have to be an idiot to take a high interest loan when you could do one for less. You’d basically be burning money.

A little bit more thinking.

So if you’re the kind of person who’s on the other side of a high yield credit product, you’re paying a lot to borrow a little bit of money. So that must mean your company has bad credit.

Taking this discovery and zooming back out: HY credit is an aphorism for “high risk” credit, which is basically a nice way of saying “I’m a credit trader who mostly trades debt for shitty companies”