FT reflects on SocGen’s Albert Edwards note:
"We look at the recovery in the credit aggregates and find all that is happening is that US corporates are once again engaging in their bad old destructive practices. For despite all the talk of cash rich US corporates, that has not stopped them returning to the credit markets to leverage up their balance sheets even more– spending the proceeds, almost dollar for dollar on equity buybacks
(see chart below). History suggests this always ends badly. Maybe this time will be different, but I fear otherwise."
The short end of the curve is getting ever more crowded.......
"We look at the recovery in the credit aggregates and find all that is happening is that US corporates are once again engaging in their bad old destructive practices. For despite all the talk of cash rich US corporates, that has not stopped them returning to the credit markets to leverage up their balance sheets even more– spending the proceeds, almost dollar for dollar on equity buybacks
(see chart below). History suggests this always ends badly. Maybe this time will be different, but I fear otherwise."
The short end of the curve is getting ever more crowded.......
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