“Profits are higher – in no small part because the Fed’s ZIRP has made it possible to borrow cheaply. Companies used the cheap credit to do two important things: 1) Refinance expensive debt, lowering interest expenses and thereby pushing up net profit margins; 2) Buy back their own shares, raising their share prices. It’s not likely they’ll be able to repeat the trick in 2014. Because interest rates are moving up. If you can earn 3% on “risk free” Treasurys… does it make sense to buy overvalued stocks? Real estate? Andy Warhol doodles? Will any investment do better than 3%? Is the extra risk worth the extra reward?”
http://www.bonnerandpartners.com/this-unexpected-event-will-cut-the-sp-500-in-half/
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Tip Freedomwat.ch Staff with Bitcoin
Related posts:
Pepe Escobar: Burn, burn - Africa's Afghanistan
Jim Rogers: 'I Suspect They’ll Take the Pension Plans Next; I'm Taking Preparations'
On Syria (and all else), it's 'Us' against 'Them'
An American Stasi
Justin Raimondo: Police-State ‘Progressivism’
Global War on Terror (GWOT) Was a Hopeless Blunder from the Get-Go
Bill Bonner: A New American Century?
Wall Street: The Next Fed Chief Should Keep the Presses Running
Quagmires Are Often Just a Few Steps Away
State Department: “We cannot make India look at you as an American”
Solving the Detroit Crisis
Marc Faber on Gold & Debt
Can Obama Control Syrian Outcomes?
Mainstream Media Rule: Never Question the Warren Commission
You Don’t Need a Weatherman to Know Which Way the Wind Blows