The unemployment rate of the Unites States has fallen to near five year lower of 7.4%, so why aren’t the folks at CNBC and Bloomberg drooling over these recent statistics? Probably because much of the return we’ve seen in the past year and a half – the majority of which has been the primary reason market indexes are close to their 2006 and 2007 peaks. The reality is that much of the market capital business’s have used to leverage the new projects and outlays spurring on these recent statistics. With such astoundingly low interest rates, as long as the money markets are able to keep reasonable levels of liquidity without scaring off long-term investors – we should see all this borrowing shift towards Equity that’s being re-invested into the firm annually.
Posted in Uncategorized.