But US households have de-leveraged in the last five years. Household debt as a proportion of income has come down from 130% to 105%. By this measure, currently US households are less indebted than European ones.
Why Reinhart And Rogoff Still Matter [View article]
chazsf,
You need look no further than Greece to see how slow growth causes borrowing costs and dept to GDP ratio to explode.
Why do you think this is not happening in Germany whose debt is in excess of 80% of GDP (Greece's debt to GDP before the crisis was about 90%)? Because of growth and confidence.
When an economy is demonstrating positive trends like high efficiency, structural adjustment to changing economic landscape and, as a result, is growing, high debt is not a problem.
I was sure FDX was a good deal back in April but was sucking my thumb (and frankly didn't have much free cash).
Now at USD 101 it seems still a good deal but then psychology deters me from buying. "Why buy now when I didn't buy a couple of weeks much cheaper". Silly, but that's that way it is!
A Bubble In 'Safety' Driven By Bond Funds? [View article]
Buying existing assets shows appetite for risk and confidence in the economy. And as long as this is not irrational it is not a bad thing.
It has at least two closely linked positive effects on investment:
- if one player shows confidence other may become more confident too an in turn invest, including in greenfield investments (which you would consider productive, and I see your point there).
- buying assets further reassures investors that there is liquidity int the system and that too further stimulates investments (again, including greenfield).
And finally you cannot know the "productive" qualities of such transactions until you see what the seller of the asset does with the acquired funds. The money could be going into newly issued bonds or simply spent on consumption - both productive activities.
If I Could Buy Just One Stock, It Would Be This One [View article]
I like MaterCard too. When you say MA will outperform do you mean longer term, 3-5 years?
Currently Visa's valuation is a bit too rich so I am not saying that right now is the best time to buy it. Though as a longer term investment it wouldn't make much difference.
Visa Or MasterCard? My Money's On Visa [View article]
But if it has to be one of them, I concur. Visa.
Home Depot Earnings Preview: Fully Valued, But Big Ticket Comps Have Returned Big Time [View article]
This Big Hedge Fund Is Bullish On Big Companies; Should You Be? [View article]
2013: The Year Of Printing Money [View article]
SodaStream Q1 2013 Earnings Preview [View article]
Moreover, he seems not only excited and passionate but apparently he executes and delivers. A nice combination that should lead to success. :-)
Why Reinhart And Rogoff Still Matter [View article]
You need look no further than Greece to see how slow growth causes borrowing costs and dept to GDP ratio to explode.
Why do you think this is not happening in Germany whose debt is in excess of 80% of GDP (Greece's debt to GDP before the crisis was about 90%)? Because of growth and confidence.
When an economy is demonstrating positive trends like high efficiency, structural adjustment to changing economic landscape and, as a result, is growing, high debt is not a problem.
SodaStream Q1 2013 Earnings Preview [View article]
FedEx: Great Company Good Price [View article]
Now at USD 101 it seems still a good deal but then psychology deters me from buying. "Why buy now when I didn't buy a couple of weeks much cheaper". Silly, but that's that way it is!
AIG - The New Darling [View article]
An amazing display of Mr Market's pessimism!
SodaStream Q1 2013 Earnings Preview [View article]
The CEO said on Bloomberg that things are just beginning for SODA. He seemed genuinely excited about the future.
Do you know why there was such a big sell off in the last days (despite the beating of estimations)? Profit taking?
Norfolk Southern's best is still to come, CEO Moorman tells stockholders [View article]
(Conclusion reinforced as I am 27% up with NSC in less than 6 months.)
A Bubble In 'Safety' Driven By Bond Funds? [View article]
It has at least two closely linked positive effects on investment:
- if one player shows confidence other may become more confident too an in turn invest, including in greenfield investments (which you would consider productive, and I see your point there).
- buying assets further reassures investors that there is liquidity int the system and that too further stimulates investments (again, including greenfield).
And finally you cannot know the "productive" qualities of such transactions until you see what the seller of the asset does with the acquired funds. The money could be going into newly issued bonds or simply spent on consumption - both productive activities.
If I Could Buy Just One Stock, It Would Be This One [View article]
Currently Visa's valuation is a bit too rich so I am not saying that right now is the best time to buy it. Though as a longer term investment it wouldn't make much difference.
SodaStream Q1 2013 Earnings Preview [View article]
If I Could Buy Just One Stock, It Would Be This One [View article]
I give you a thumb up! :-)