Corporate Leverage

S&P Downgrades China To A+ From AA- Due To Soaring Debt Growth

"The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China's economic and financial risks. Since 2009, claims by depository institutions on the resident nongovernment sector have increased rapidly. The increases have often been above the rate of income growth."

Corporate Leverage Has Never Been Higher

With the following chart from Goldman's Robert Boroujerdi, we can finally close the book on whether US corporate leverage is at all time highs. It is... and it's even higher on a "normalized" basis.

"Is The Equity Market Irrational Yet?" Citi Answers With The Following Chart

As the cycle matures, pair-wise correlations drop. When the cycle turns and stock markets drop, correlation picks up rapidly as investors “sell what they own”. In 2000/2001 and 2006/2007, this correlation indicator fell to around 20% before markets peaked out. We are currently at 30%.

What Keeps Bank of America Up At Night

"The last two weeks have further underpinned our belief that the market has had misplaced optimism in the new administration's reform agenda, while we find more and more evidence that suggests the macro environment echoes that of 2014 and 2015."

Corporate Debt To EBITDA Hits All Time High

"When using the aggregated data, both gross and net corporate debt/EBITDA are at or near record leverage levels, well above prior cycle peaks." - Morgan Stanley