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corporate - finance example is also consistent with what we have observed in markets in recent months. issuance of both investment - grade and high - yield bonds has been robust. indeed, domestic nonfinancial corporate bond issuance is on pace to set a record in 2012, and the speculative - grade segment may also register a new high for the year. at the same time, a large fraction of issuance has been devoted to refinancing – either to retiring existing debt or to payouts to equity holders via dividends and share buybacks. these uses of proceeds have accounted for about two - thirds of all issuance by speculative - grade firms so far this year. such patterns are what one would expect in a world of segmented markets and negative term premiums. 12 this caveat about the diminishing effectiveness of lsaps can be thought of as a specific version of goodhart ’ s law. 13 it may be that under normal circumstances, changes in 10 - year rates have significant explanatory power for economic activity, perhaps because they are a proxy for the expected future path of short rates or other aspects of financial conditions. but it doesn ’ t follow that when one sets out to influence the 10 - year rate directly, via asset purchases – without changing the future path of short rates – the usual historical relationships will continue to apply. while we should acknowledge these doubts, it is important to keep them in perspective. in addition to lowering interest rates, lsaps also boost equity prices and other asset values. taken together, these effects of lsaps seem likely to be meaningful, even if the benefits of an impetus to rates are less than in the baseline scenario sketched earlier. and to be sure, there is a wide confidence interval around any estimate we might make of the benefits. moreover, it is worth repeating a point made earlier : whatever direct hydraulic effects lsaps create by pushing down term premiums and discount rates, their overall impact may be reinforced via a signaling effect, whereby they enhance the credibility of our forward guidance about the future path of the federal funds rate. indeed, this signaling benefit strikes me as an important part of the argument in favor of lsaps in the current environment. let me turn now to the cost side of the equation. several potential costs of lsaps have been discussed. one is the exit problem – that a large balance sheet may make it harder for the fomc to raise rates when the time comes.