Sunday, June 19, 2016

“Businesses racked up debt in the January-to-March period at the fastest pace in three quarters"

"...this debt as been incurred in order to engage in wise capital investment, so it will be very easy to pay it back with future profits…. well, not really, actually. A lot of it appears to have been wasted in decidedly unprofitable investments. This should be no surprise with administered interest rates at zilch for many years.

The rest has been judiciously deployed for financial engineering purposes, such as stock buybacks, m&a activity and even dividend payments. This, we hear, has been quite good for the stock options of many a corporate executive.

...charge-offs and delinquencies in commercial loans;

...maybe buying junk bonds here isn’t the best idea ever. Just a hunch...

...the things that attract little attention are often worth watching very closely.