Monday, May 09, 2016

Growing Corporate Debt & Asset Froth
Are Highly Combustible
"The current paradigm of growing corporate debt issuance combined with factors artificially-generating asset froth is highly combustible. The lack of investment visibility and impairments to credit normalcy will act to limit economic growth. Throw in paralyzed fiscal levers and exhausted monetary tools and the mix is problematic .. Making matters much worse is the decision yesterday by the China Banking Regulatory Commission to crack down on their shadow banks. Their banks will no longer be able to disguise loans as investment. Buy Treasuries."
- Guy Haselmann, Scotiabank


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