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“In less than three months time, the Fed has done everything it did under QE1, plus everything it did under QE2, plus half of what it did under QE3!“ https://s
by igravious 6y ago
“In less than three months time, the Fed has done everything it did under QE1, plus everything it did under QE2, plus half of what it did under QE3!“
https://seekingalpha.com/article/4349214-fed-is-dead https://seekingalpha.com/article/4349214-fed-is-dead
How can there be a global corporate solvency crisis given the amount of money flowing from central bank spigots?
Unless, of course, corporations have used the very cheap interests rates of the last decade or so to buy back there own shares, which is great for shareholders but terrible for the economy at large.
https://www.visualcapitalist.com/stock-buybacks-explained/ https://www.visualcapitalist.com/stock-buybacks-explained/
So the stock market is going gang busters but many global corps are swimming in debt.
Wonderful.
edit: caveat – this obviously is a fairly simplistic caricature of the financial picture, but it's not entirely inaccurate!
- happytiger 6y agoThe issue is that liquidity — the ability to meet short term obligations — and solvency — the ability of a corporation to meet long term obligations are not the same thing. The fed has provided lots of liquidity. The crisis is in the “zombie corporation” question: the solvency.