S&P 500 Median Stock Net Leverage

S&P 500 Median Stock Net Leverage Net leverage of the median S&P 500 companies reached new highs, above 1.8. Picture source: Goldman Sachs Global Investment Research

Hedge Fund Gross and Net Leverage

Hedge Fund Gross and Net Leverage Despite the trade war, hedge fund leverage remains high, compared to the average level of the last five years (aggregated data from Goldman Sachs Prime Services, as of August 19, 2019; should not be relied upon as a comprehensive view of the market). Picture source: Goldman Sachs Global Investment…

Corporate Leverage in the U.S.

Corporate Leverage in the U.S. U.S. corporate debt is high. This chart shows that U.S. corporate leverage is close to its previous peak on a net debt to EBITDA. You may also like “U.S. Leveraged Loan Index Rating Breakdown: 2008 vs. 2019.” Picture source: Credit Suisse Research

U.S. Leveraged Loan Index Rating Breakdown: 2008 vs. 2019

U.S. Leveraged Loan Index Rating Breakdown: 2008 vs. 2019 Since 2008, this chart shows that U.S. leveraged loans are getting lower ratings. Any drop in the credit ratings could also amplify the next recession. Picture source: Standard & Poor’s Leveraged Commentary & Data, UBS

Leveraged loans pose risks as corporate debt increases

Leveraged loans pose risks as corporate debt increases A leveraged loan is debt issued by a company that has below investment grade credit ratings and a considerable amount of debt with high interest rates. In this video, Brian Cheung of Yahoo Finance, explains why leveraged loans pose risks as corporate debt increases.

Zombie Companies on the Rise

Zombie Companies on the Rise Investor demand for leveraged loans and artificially low interest rates have created zombie firms. Picture source: Quick Factset

Increased Number of Zombie Companies

Increased Number of Zombie Companies Artificially low interest rates and investor demand for leveraged loans have created zombie firms. Picture source: Jupiter Asset Management

Stock Market Forecasting Models vs. US Stock Market

Stock Market Forecasting Models vs. US Stock Market – Growth of $1,000 As an example, the chart shows the growth of $1,000 since 1970, between the stock market forecasting models and the US stock market (compound return before taxes, fees and transactions costs – unleveraged, simulated long & short trades – quarterly basis & logarithmic…

Why Potential GDP Has Been Cut in Half Since the 1950’s?

Why Potential GDP Has Been Cut in Half Since the 1950’s? The main reason is a lower productivity than previous business cycles, due to: – lower population growth – the service sector is growing faster than the industry sector – lower quality jobs in the service sector have a lower productivity than in the industrial…