What can go wrong? Corporate balance sheets are laden with twice the amount of debt since the pre-crisis levels of 2007. In retrospect, that worked out well for the market, so I imagine this debt bubble will too.
“Companies in the United States have taken advantage of low interest rates to issue record levels of debt over the past few years to fund buybacks and M&A,” Goldman analysts led by Robert Boroujerdi wrote in the note. “This has driven the total amount of debt on balance sheets to more than double pre-crisis levels.”
I can tell you first hand, since the housing bubble burst and the market recovered, investment banks’ favorite go to product has been oil and gas debt instruments. If, by chance, we are to be blessed with a tipping point event, one that ravages and consumes the entire market and swallows it whole, odds are it will begin in the asinine oil sector.
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Love the idea of taking on debt to buy back your own stock. Might as well buy credit default swaps with debt too.
Oh yeah, FIG.
Don’t give ’em any ideas.
Arch Coal just said they may file bankruptcy in the “near term.” Coal has been a dead man walking for a while but this is still notable.
No ‘cuss words (asinine- close, but doesn’t count.
Disappointing and so close to the iBC anniversary , too.