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Will any increase in rates have an impact on large corporations ability to borrow money?

July 2, 2015

Rick Ackerman joins Cory Fleck to chat about the potential of a fall in the markets impacting everything. We then move on to whether an increase in interest rates will limit the large corporations ability to borrow money or discourage them at all.

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Discussion
30 Comments
    bb
    Jul 02, 2015 02:47 AM

    Jobs created are waiters/bartenders, ok, but someone is buying the meal and drinks.
    Or are these jobs the basic 4% turnover?

      Jul 02, 2015 02:49 AM

      They really need to go around the U.S. and see all the high paying tech jobs that are being created. Just go to San Francisco, LA, Austin, NY, Boston, etc, etc.

      Amazing – he screams about all the retail that is being closed then turns around and talks about the only jobs being created is retail. Reality be a bitch.

        Jul 02, 2015 02:37 AM

        Bottom line is the only growth we have had is a result of credit growth, which is essentially a function of the size of the Fed’s balance sheet, which peaked December ’14. No more QE, no more growth.

          Jul 02, 2015 02:26 PM

          Good point, Spanky

      Jul 02, 2015 02:11 AM

      Probably us gooberment employees buying the meals.

        Jul 02, 2015 02:26 PM

        At least you have a steady job with security. Hard to fault, Jason!

      Jul 02, 2015 02:25 PM

      Not an expert here, but Gary said that he has not seen a meaningful decrease in Las Vegas traffic!

    Jul 02, 2015 02:48 AM

    Gday. A lot of large corps have tons of cash. Interest rates may only climb slowly. I don’t think USA has any serious threats at this time and it looks Rosy up against the backdrop of a pile of countries. Cash will continue to flow were its best treated and that’s the U.S. For now….?

      Jul 02, 2015 02:52 AM

      Europe, Canada, China, Japan, Australia, South Africa, Mexico, New Zealand etc, etc have much larger debt problems then the U.S. Money will continue to wash on these shores because they get the double whammy of getting higher dividends and investing in a currency that is appreciating.

        Tom
        Jul 02, 2015 02:23 PM

        Tyler:

        I’m afraid you are mistaken. It is the policy of the U.S. government to devalue its own currency. The U.S. might be a safer place to park an investment but that investment is not getting a double whammy.

        Jul 02, 2015 02:01 PM

        To be honest, I don’t understand why China has huge problem of debt while the country has been running trade surplus for decades and hold large reserves. Government even restrict the purchase of its treasury by general public. I am not sure where the debt figure comes from and never saw anyone break down on those debts. From the official figure, there are 32 trillion yuan debt but there are 25 trillion reserve and 120 trillion pension fund and a lot more. People also save huge amount of money. My parent’s saving equals 10 years’ of their pension income. I understand that provincial governments have debt and government owned enterprises have debt. That is it. They most own to themselves not foreign countries. Very little private debt. People love saving. Some private companies borrow from loan sharks but they can all default without bring down the banks. It is the loan sharks who will go broke. One of my friends was involved in this activity by loaning his money at 18%. He does not care to lose it all. A few people may lose their heads but it does not bring the system down. Do anyone real know what Chinese debt picture before they quote what media has been saying? It really does not fit my experience, especially the culture. All the people I know have saved a lot of money. One of my cousins just bought a house with cash and she is not rich. Same with people who bought house in Vancouver. US debt is larger than all the rest of world put together. So it should have more problem. I see here banks, government always encourage people to borrow and spend but it does not happen in China. It is considered to be a shame to spend all.

          Jul 02, 2015 02:15 PM

          I remember when we bring up China and we always say their problem is that they save too much. Greenspan even blamed American debt on glut of Chinese savings. Since when Chinese problem has shifted to borrowing too much? And borrow from whom? China has been the creditor. Someone has to lend to them. It does not look like anyone has the money. There are too many country who want to borrow from China instead of lending China money.

            bb
            Jul 02, 2015 02:26 PM

            Good points Lawrence
            They have the money to help Russia replace the business lost to sanctions, bail out Greece, build a railway from Bejing to Berlin and buy mines and other assets all over the world.
            Looks like they are doin ok to me.

            Jul 02, 2015 02:38 PM

            I know China has tremendous problems. The most important one to to maintain stability and make sure people does start to revolt. Debt is one problem but not the dominant one as I know. Leaders seems always emphasize on ease people’s anger.

            Jul 02, 2015 02:42 PM

            The previous president Hu spent all his terms for harmony and the new president has been turning the gun to his comrades to attempt to quell corruption.

      Jul 02, 2015 02:27 PM

      Yes, that is certainly where it is treated the bet right now.

    Jul 02, 2015 02:51 AM

    I’d also point out today is a right before a holiday weekend, and many traders are likely flattening out of positions.

      Jul 02, 2015 02:52 AM

      Plus are waiting for the Greek vote on the 5th. I am scaling out of my trades now.

        Jul 02, 2015 02:57 AM

        I have positions on in some sectors, but have moved much to the sideline waiting for the summer doldrums to trudge along. I’ve been refining my watch-lists, reviewing a great deal of company information and technical analysis on stocks, because I think we’ll get a little bounce in PMs, but then expect a further pullback in the miners in mid-late July, and then I may start building positions.

          Jul 02, 2015 02:59 AM

          As for Bonds, the general markets, and the dollar – I’m kind of neutral. I’d like to get the Fed-speak, Greece mess, and other data points behind us to see how things reshuffle.

          Jul 02, 2015 02:07 AM

          Now flat with my trading account. Going to start 4th vacation now. Good luck. My guess is the Greeks will get in bed with Russia and jettison the European Union..

            Jul 02, 2015 02:27 AM

            Yep, I think the rest of the day will be rather boring, but sometimes in thin trading there are exaggerated moves. Have a great 4th of July holiday weekend!

            Jul 02, 2015 02:25 AM

            In the uranium space, I picked up some (URG) Ur-Energy shares today at $.76, a small insitu producer in Wyoming, that has a bright future, but is shares got beat down lately. I expect by the end of the year it should be over a buck.

            Jul 02, 2015 02:29 PM

            Wouldn’t that be interesting! I personally don’t think it will happen. Talk about a true black swan!

            Jul 03, 2015 03:55 AM

            China State Official Hints Beijing May Bailout Greece
            Submitted by Tyler Durden on 07/02/2015

            http://www.zerohedge.com/news/2015-07-02/china-state-official-hints-beijing-may-bailout-greece

    Jul 02, 2015 02:30 AM

    Not sure how Rick can say QE is irrelevant in light of the S&P vs the Fed balance sheet chart. They are basically nearly perfectly correlated. The Fed’s balance sheet topped out in December ’14 and the S&P has been range bound ever since.

    Jul 03, 2015 03:00 AM

    Gold Acting Tepid At Best, Hits 3.5 Month Low – Gary Wagner | Kitco News
    July 2, 2015 – 4:22pm
    by Gary Wagner

    http://thegoldforecast.com/video/gold-acting-tepid-best-hits-35-month-low-gary-wagner-kitco-news

      Jul 03, 2015 03:16 AM

      *There are some good charts on each of the metals that you can “tab” through at the bottom, with Jim’s annotations for the technical indicators he sees.

      *Also – there are 4 good hyper-linked articles on the following technical analysis tools embedded in this article. They are very well written.

      Sharpening Your Trading Skills: Using Bollinger Bands

      Sharpening Your Trading Skills: The MACD Indicator

      Sharpening Your Trading Skills: Moving Averages

      Sharpening Your Trading Skills: The Relative Strength Index (RSI)

      Thursday’s Charts for Gold, Silver and Platinum and Palladium, July 2
      Thursday July 02, 2015 12:03

      http://www.kitco.com/commentaries/2015-07-02/Thursday-s-Charts-for-Gold-Silver-and-Platinum-and-Palladium-July-2.html

        Jul 03, 2015 03:21 AM

        Palladium sure ended the week on a bang on those charts.

    Jul 03, 2015 03:52 AM

    Chinese Government “Losing Control”: Stocks Are Collapsing, Hitting New Bear Market Lows
    Submitted by Tyler Durden on 07/02/2015

    http://www.zerohedge.com/news/2015-07-02/chinese-stocks-are-collapsing-again-hitting-new-bear-market-lows