2018-09-23 08:37:00 Sun ET
stock market competition macrofinance stock return s&p 500 financial crisis financial deregulation bank oligarchy systemic risk asset market stabilization asset price fluctuations regulation capital financial stability dodd-frank
Bank of America Merrill Lynch's chief investment strategist Michael Hartnett points out that U.S. corporate debt (not household credit supply or bank capital shortage) can cause the next financial crisis.
U.S. public corporations have gradually accumulated more than $6 trillion debt with low interest rates since the global financial crisis from 2008 to 2009. This corporate debt binge helps fund the recent recovery in new capital investment and equipment, full employment, and stock buyback in America.
Corporate default rates are minuscule, and U.S. companies now sit on hefty cash stockpiles primarily due to robust U.S. economic output gains and corporate tax cuts under the Trump administration. At some inflection point, however, economic growth and corporate income may start to slow down. U.S. companies then would have less firepower to pay back debt, and it is not easy for these companies to roll over their debt in due course. Debt-laden companies would be vulnerable to higher costs of capital as the Federal Reserve continues the current interest rate hike.
These high costs of capital can translate into a new corporate credit crunch, which adversely affects both employment and capital investment as the U.S. economy slides into an economic recession.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-10-03 11:37:00 Wednesday ET
Fed Chair Jerome Powell sees a remarkably positive outlook for the U.S. economy right after the recent interest rate hike as of September 2018. He humbly su
2018-01-15 07:35:00 Monday ET
Treasury Secretary Steven Mnuchin welcomes a weak U.S. dollar amid pervasive fears of an open trade war between America and China. At the World Economic For
2022-11-30 09:26:00 Wednesday ET
Climate change and ESG woke capitalism In recent times, the Biden administration has signed into law a $375 billion program to better balance the economi
2017-02-13 09:35:00 Monday ET
JPMorgan Chase CEO Jamie Dimon says President Trump has now awaken the *animal spirits* in the U.S. stock market. The key phrase, animal spirits, is the
2019-12-01 10:31:00 Sunday ET
Goop Founder and CEO Gwyneth Paltrow serves as a great inspiration for female entrepreneurs. Paltrow designs Goop as an online newsletter, and this newslett
2017-01-23 09:30:00 Monday ET
There are several highlights from the first news conference after Trump's presidential election victory: The Trump administration will repeal-and-