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Citi Asks "Who Is Levering Up?", Answers "Everyone" And Finds Median Leverage Has Never Been Higher
Hopefully this will end the debate about US corporate "deleveraging", which is really leveraging whose proceeds are used to fund pervasive stock buybacks and raise the S&P 500 in what is nothing short of a massive, creeping MBO of the entire market, once and for all.
From Citi's Stephen Antczak
Who is Levering Up?
"Pretty much everybody. We calculate leverage for the IG universe today and three years ago (leverage ratio on the Y axis, names on the X axis and ordered from most to least levered). In gross and net terms there has basically been a parallel shift upward."
“Sneaky” Leverage on the Rise as Well
"One way to lever up is buyback shares, an activity that has been on the rise. Another way is grow assets faster than equity, and activity that has also ticked up recently."
What does that mean about overall leverage?
"We calculated leverage for two baskets of names — the overall IG universe updated quarterly since ’06, and for a basket comprised of credits that held an IG rating at any time since ‘06 (to capture falling angels). Either way, it doesn’t look good."
And by "it doesn't look good", Citi of course, means "doesn't look bad"
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well, duh
Police Have a Much Bigger Domestic Abuse Problem Than the NFL - The Atlantic
Must protect the ( tax payer funded ) hired muscle....Prepare for an onslaught of apologetic insults and were just doing our job speak.
the thing about buybacks ... shrinks the supply of shares, obviously ... which is great for EPS when earnings on way up ... but, uh, when earnings head back down (they will regress to mean sooner or later) ... heehee ...
Way off topic. Watching this NFL news conference is leaving me wondering why we don't hold our elected government officials to the same high standard they are asking Roger Goodell to assume.
Obama for one hasn't been asked any tough questions from the beginning. Neither have people like Bernanke or now Yellen. No one for instance is bringing Paul Krugman to task. Jon Corzine never was. The list goes on and on. This is just unreal.
Right but this is organized sports, AKA 'what's really important', and we need some damn accountability! Thousands of fantasy footballers are counting on it!
Welcome to the newest game show sensation "The Oligarchs Go Scott Free"
There really are no wrong answers in this multiple choice quiz show format:
Example Question: If (ever) indicted and convicted, how many years will Jon Corzine get?
a) 20
b) 12
c) 8
d) 0 - he walks
Contestants quickly figure out that everyone walks (actually, they never get indicted) so the gratuitous prize flow of cheap Chinese made crap never stops for the whole show.
Indicted and convicted for what? What's the statute of limitations for "vaporizing" money? The penalty is a fine, paid of course in "campaign contributions." In Corzine's case, the fine was paid in advance.
https://www.google.com/#q=corzine+obama+bundler
Borrow as much as possible before the whole shithouse goes up.
Sure seems that's the game.
Worked out so well for sub prime.
I'm sure its different this time though.
Everyone all-in fully leveraged, just sitting back collecting all the guaranteed perpetual free money....what could possibly go wrong?