Category Archives: Investment outlook

Wolf Richter: Debt Fueled Stock Buybacks Now Eating into Earnings

Companies with investment-grade credit ratings – the cream-of-the-crop “high-grade” corporate borrowers – have gorged on borrowed money. Interest on that mountain of debt, which grew another 4% in the second quarter, is now eating their earnings like never before.

Frances Coppola: The Great Yield Divergence

Puzzling over the Great Divergence of real and nominal yields. Ever since the Great Depression, nominal yields have been persistently above real yields Yet in the previous 200 years, despite periods of fiat currency and high inflation, real and nominal yields didn’t diverge. Why do they now?

Wolf Richter: This is When Bonds Go Kaboom!

It’s getting tougher out there for our QE and ZIRP-coddled corporate junk-bond heroes.

Wolf Richter: Bankers Threaten Fed with Layoffs if it Doesn’t Raise Rates

Yes, banks really do want the Fed to raise interest rates.

Low Unemployment with Falling Capacity Utilization… Not a Good Sign for Fed Liftoff

Why the Fed should delay its long-anticipated “liftoff”.

Nomi Prins: Mexico, Federal Reserve Policy and Danger Ahead for Emerging Markets

Mexico’s problems could again ripple through Latin America where eroding confidence, volatility, and US dollar strength are already hurting economies and markets.

Wolf Richter: Corporate Revenue Recession Spreads past Dollar, Energy

Now that 495 of the S&P 500 companies have reported second quarter earnings, something has become abundantly clear: 2015 is going to be a nasty year for corporate revenues.

Real Household Net Worth: Look Out Below?

Even with the wild end-of-day rally yesterday, Steve Roth describes how absent a strong continuation of the snapback, real household net worth is likely to show a year-to-year fall by the end of September. And that’s not a good sign at all.

Wolf Richter: Americans’ Economic Outlook Plunges

The latest poll of Americans’ economic outlook shows most expect things to get worse…and the survey was before the market rout started last Friday.

Michael Hudson: Smoke and Mirrors of Corporate Buybacks Behind the Market Crash

Hudson clearly differentiates what is happening in the Chinese versus the US markets, with emphasis on the role of corporate buybacks here.

Wolf Richter: It Starts – Broad Retaliation Against China in Currency War

Struggling economies that compete with China are going to protect their exports against Chinese encroachment via currency depreciation.

Michael Pettis: Do Markets Determine the Value of the RMB?

A thorough discussion of the background and implications of the so-far modest devaluation of the RMB.

The Decline in Market Liquidity

While the Fed isn’t worried about the fall in market liquidity, experts argue that if investors make abrupt changes in their portfolios, the lack of liquidity could produce a crisis.

China’s Stock Market Collapse

Those who are looking only at Greece and the crazy behaviour of the European Union may well be looking in the wrong direction to identify the next big crisis as it comes.