Debt for Dividends

In another episode where the comics page eerily mirrors real life, a recent “Garfield” cartoon has Garfield confronting a resident rat who has been taking cheese, but leaving IOUs, from the “cheese drawer” of the refrigerator. Garfield threateningly says to the rat “Stop with the IOUs” and the rat calmly holds up his hand . . . → Read More: Debt for Dividends

The Coming Market Crash

“By the pricking of my thumbs, / Something wicked this way comes” is from Act 4, scene 1, lines 40-41 of the Bard’s Macbeth.

A year ago at Cambridge House when asked whether the economy was going to rebound I responded, “That light at the end of the tunnel is just the next train.  Get . . . → Read More: The Coming Market Crash

What Is the Rate of Economic Growth Implied by Current Equity Prices?

There is a standard joke among economists that equity markets have predicted about 10 of the last 5 recessions. As the joke acknowledges, equity prices embody predictions of future earnings and this implies that they also embody predictions of economic growth rates.

So, what is the rate of economic growth implied by current equity . . . → Read More: What Is the Rate of Economic Growth Implied by Current Equity Prices?