“The past several years have featured little more than a gigantic asset swap, the short description being that massive volumes of government debt have been swapped by central banks for massive volumes of idle bank reserves, while massive volumes of low-yielding, covenant-lite debt have been issued into the hands of yield-seeking investors, in order to retire massive volumes of corporate equities at elevated valuations through buybacks. This has left the U.S. economy with a much more leveraged balance sheet than before the last crisis, and with much greater sensitivity to equity risk and debt default than at any point in history.”

http://www.hussmanfunds.com/wmc/wmc150511.htm

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