Author doesn't really understand the situation.

The problem, which started becoming visible in 2001, is that in the aftermath of the "dot-com boom", the ratings agencies starting rating a lot of things AAA that were not, in fact, AAA. That is not "an excess of overcaution". In fact it was an exploit of the banking/finance system, that went like this:

    -- lots of places are required by law or regulation to only invest in AAA securities, because they/the public don't want to lose any money.  They have a LOT of money to invest.
    -- but they don't check the shit themselves
    -- they depend on a rating agency
    -- ratings agencies are paid by the issuers
    -- they are exploitable
    -- bribe the rating agency to give my shit a AAA rating, and now I can sell a ton of it
    -- offer the investor a slightly greater than AAA return, and they love it
    -- everyone is happy: rating agency is bribed, investor is getting better returns than expected, and I can sell all the shit I can package up
    -- until it all falls apart.

And the far right side of the chart is just a continuance of the same thing: our shit fell apart, what should we do? Well, the easiest thing is to bribe the politicians to take our private debts and turn them into public debts. And so it happened. That big tall lavender bar in 2009 is the dark purple lines from a few years prior....

None of this has anything to do with an excess of caution or with AAA debt being more systemically dangerous than other types of debt. The blogger here almost grasps what is wrong:

> "That’s possibly the most horrifying bit of all: it simply defies credulity for anybody to be asked to believe that more than half the bonds issued in any given year are essentially free of any credit risk."

but he skips past the correct answer, which is that the ratings agencies have been suborned.