The focus on China as if their problems were only Chinese is highly misplaced, though you can understand the appeal of the excuse. This sentiment was expressed over and over today (just as it was in August): Do we all live in China now? Investors could be excused for thinking that, given that arcane indicators such as a Chinese manufacturing [...]
Since the vast majority of business cash flow is derived through profits, the basis for the declining cash flow incidence resides within the profit function of US business. Since there are multiple avenues to arrive at aggregate profit estimates, there is the potential for disagreement as to the assumed health of net income across domestic business. The primary complication is [...]
We still may not know the difference between cause and effect, but margin debt balances dropped in March for the first time in ten months. The $14 billion decline in margin debt was also coincident to an increase of $6 billion in relative cash balances in equity accounts at FINRA dealers. That meant total investor net worth “improved” by a [...]
In February 2013, more than a year ago, Jeremy Stein, Federal Reserve Board Member, openly expressed concern over behavior in certain sectors of the financial markets. He categorized this as “reaching for yield”, but there was more than a whiff of caution in his exposition of leveraged loans and junk debt. “The annualized rates of PIK bond issuance and of [...]
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