Silver as an investment

Category Archives: Corporate Leverage

Credit Suisse “Climbs The Wall Of Worry”, Raises S&P Target To 2,500 From 2,350

Following bearish reports from Goldman (which tactically downgraded stocks to Neutral for the next three months just hours before the Fed rate hike), RBC and JPM’s head quant Marko Kolanovic over the past week, overnight Credit Suisse decided to take the other side of the trade and hiked its year end forecasts for the S&P500, […]

Fitch On China: ‘Banks Face Capital Pressures and Structural Risks’

Fitch Ratings’ outlook for the Chinese banking sector in 2017 is negative, reflecting our view that weak profitability and strong credit growth will keep capitalisation under pressure. High and rising leverage in the corporate sector remains a key risk facing China’s banks.   China’s debt-resolution timeline is being pushed back by measures to lessen the […]

Inflation Is About To Spike Due To The “Base Effect”

This past May we explained that one of the officially stated reasons why the Fed had delayed hiking rates (a situation that remains unchanged some 5 months later) is because CPI inflation in late 2015 and early 2016 had been lower than the Fed’s bogey. And, based at least on the CPI’s basket weighing of […]

Hangzhou, We Have A Problem: “Over 71% Of New Chinese Loans Went To Fund Mortgages”

As Evercore ISI notes in its latest China weekly summary, the “biggest China policy development last week, was multiple cities establishing new rules to slow the spreading housing mania,” adding that this was “surely at Beijing’s behest“, it now indeed appears that China is once again trying to cushion a soft landing for a housing […]

$195 Billion Asset Manager: “The Time Has Come To Leave The Dance Floor”

We find it surprising how, having covered the unprecedented growth in US corporate debt over the past few years, which has more than doubled from $2 trillion at around the time of the financial crisis to approximately $6 trillion currently…   … resulting in a debt/ETBIDA ratio that has never been higher… … some are […]

“Seven Signs Of A Deeply Dysfunctional Market” – Why Citi Is Also Warning Of “Surprising, Sudden, Intense” Tail Risk

In his latest letter, Elliott Management’s Paul Singer reached new levels of bearishness, warning that the “bond market is broken”,  the loss of confidence from the failure of central bank actions “could be severe” and that “the ultimate breakdown (or series of breakdowns) from this environment is likely to be surprising, sudden, intense, and large.” […]

Debt-To-EBITDA Ratios Are Now The Highest In History

Remember when nearly a decade ago, just before the last credit bubble burst, investors (at least those who cared about fundamentals) were loading up on risk  – after all “the music was still playing” – but casting fearful glances at the relentless rise in corporate leverage ratios as debt-to-EBITDA was rapidly rising, if not as […]

US Futures Dip, European Stocks Slide After EU Court Slams Italian Bank Bailout Plans

After a head-scratching S&P500 rally – which not even Goldman has been able to justify – pushed stocks to new all time highs with seemingly daily record highs regardless of fundamentals or geopolitical troubles, overnight US equity futures dipped modestly, tracking weak European stocks as demand for safe haven assets including U.S. Treasuries and gold […]

When Brexit Has Come And Gone, The Real Problems Will Remain: A Reminder From Socgen

In a few days, Brexit will come and go, and just a few days later it will be forgotten, as either outcome will be far less dramatic than has been widely predicted by the same fearmongering economist pundits who have been wrong about everything else for the past 8 years. Ironically, the better outcome for […]

The “Crazy Growth In Corporate Debt” Is Finally Noticed: Bloomberg Issues Stark Warning

By now it is a well-known fact that corporations have no real way of generating organic profit growth in this economy (the recent plunge in Q1 EPS was a stark reminder of just that), so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (also […]