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David Stockton's been pounding this for a long time, he pointed out that Toys R'Us was the first canary to fall. His point is, cheap credit has allowed many unh

David Stockton's been pounding this for a long time, he pointed out that Toys R'Us was the first canary to fall. His point is, cheap credit has allowed many unhealthy businesses to keep sputtering along for a long time without making changes. Granted, Stockton is kind of a gold bug, and former Reagan budget director trickle down fan, but he's reformed on the debt issue and taxes now, and has been basically predicting an apocalypse once central banks start cleaning up their balance sheets and tightening interest rates.

thaumasiotes 9y ago
> he pointed out that Toys R'Us was the first canary to fall. His point is, cheap credit has allowed many unhealthy businesses to keep sputtering along for a long time without making changes That's an odd point to support with Toys R Us? From what I read, a third party borrowed money to buy the (profitable) Toys R Us. The new, indebted, Toys R Us is still profitable except for the cost of servicing the debt that, notably, it didn't choose to take on. Therefore it's going bankrupt and the buyers are getting wiped out, but the store will be fine because its business is perfectly healthy - revenues exceed cost of operation.