The US Economy Continues To Look Stronger And Stronger

BI ^ | 1-26-2015 | Sam Ro

[blam]

Sam Ro
January 26, 2015

There's nothing wrong with using a little borrowed money to finance purchases. For businesses, financing with debt is cheaper than financing with equity.

One of the things that's dragged on the economic recovery has been the deleveraging of consumer and business balance sheets. Specifically, everyone scaled back on the amount of debt they held, which means their assets shrank, too.

However, that trend has reversed noticeably.

"The Fed’s weekly bank lending data (released Friday) shows a continued acceleration in credit growth in the first two weeks of 2015, see chart below," Deutsche Bank's Torsten Slok said.

Of course, the big worry is that businesses are now borrowing too much. During the financial crisis, many companies found themselves with onerous interest expenses and not enough cash to cover those costs.

Despite the increased borrowing activity, corporate balance sheets have much more cash and much less debt than they did leading into the credit crisis.

For now, we can consider this releveraging as a sign of an increasingly confident economy.

(snip)

[clearcarbon]

"The US Economy Continues To Look Stronger And Stronger"

This illusion comes into being when your peers, used for comparison, are, or are becoming, third world countries.

[Varsity Flight]

“Health”-Extortion Care loans = “ASSET”
Performing (Work Camp) HMBS = Health Mortgage Backed Securities, on each U.S. head.

Extortion-Care is is the Government Work-Camp: Arbeitsziehungslager

Assets (300 million performing HMBS) = Liabilities