Friday, April 29, 2016

Debt Overwhelms Cash Flow

Here is what is really happening in our so-called "recovery":

By now it is a well-known fact that corporations have no real way of generating organic growth in this economy, so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (courtesy of central banks), the latter of which requires the firm to generate excess incremental cash. Incidentally, as SocGen showed last year, all the newly created debt in the 20th century has gone for just one thing: to fund stock buybacks.

You can read the rest @
http://www.zerohedge.com/news/2016-04-27/debt-growing-faster-cash-flow-most-record

This appears to mean that companies which can do this (e.g., Apple) are increasingly owned by the rich, while the companies which cannot are increasingly owned by us muppets.

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