Silver as an investment

Category Archives: Corporate Leverage

$200 Billion Asset Manager Warns “There’s Danger At The Door” As Markets Lose Focus On Fundamentals

There was a time "when central banking was an honest profession," remarks TCW Group's fixed income CIO Ted Rivelle, warning that "asset prices are not meant to be arbitrary quantities that are to be steered or targeted by central bankers." In his latest letter to investors, Rivelle, whose firm overseas $195 billion in assets details […]

Citi: “We Have Only Seen This Market Anomaly Twice Before: In 1999 And 2006”

With one bank after another – including Goldman, JPM and BofA – quietly urging investors in recent weeks to head for the exits in a time when the Fed is not only hiking rates but warning about “vulnerabilities from elevated asset positions“, over the weekend the latest bank to join the bearish chorus was Citi, […]

What Keeps Bank of America Up At Night

It has been a painful, bruising intellectual exercise for BofA’s HY credit strategist Michael Contopoulos, who after starting off 2016 uber-bearish, was – together with every other money manager and advisor – taken to the woodshed, and forced to flip bullish, kicking and screaming, and advising BofA clients to buy the same junk bonds he […]

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 […]