We’ve received a number of e-mails regarding the recent post on the possibility that rising CAPEX spending in the US is driving corporations to tap their credit facilities, thus increasing loan growth (see post).
The market has had a rough start of the year flipping between positive and negative year-to-date returns. However, despite all of the recent turmoil from an emerging markets scare, concerns over how soon the Fed will start to hike interest rates and signs of deterioration in the underlying technical foundations of the market, investors remain extremely optimistic about their investments.
After 5 years of de-leveraging it sure feels like things are better, right? The debt to income ratio has fallen from 1.15 to 0.9. Stocks are soaring. Corporate profits are at all-time highs. Things seem pretty good. But underneath all of this there’s a lurking fragility that remains from the credit crisis – household balance sheets are still pretty weak….
There’s a myth in the current economic recovery that just won’t die. It’s this flawed idea that businesses aren’t investing, aren’t hiring and aren’t contributing at all to the recovery. This is not true.