Quote:
Originally Posted by jyl
Most credit risk has moved to non-bank entities. Banks are awash with cash, and the pile is growing as they have little need to lend.
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Didn't I just say that..Corporations are leveraging themselves up...any down turn in the economy and sales and voila.
Cash means nothing on the Balance sheet if it is leveraged against... Equity price means nothing if the balance sheet is net zero or negative...so long as cash flow can service debt the game is on..the moment it stops...Equity pricing implodes as the corporation is nothing but an empty shell.
All it will probably take is for a big pillar of the Equity markets to default on a bond payment... then the smart money will run for the door...as they know that there is nothing left except the hollow shell of the corp.
The Global Economy is BK..
The FED is in there buying all kinds of corp debt..to provide the corp with liquidity to fund their operations..as sales have went to he11 with the cv...
In the end it is called QUASI NATIONALIZATION..the FED is part owner of Zombie corps...and the p[people are getting their subsistence checks so that they can survive..pay the bills as best they can.