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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: SGJ who wrote (10592)	12/17/2002 3:39:08 PM
From: stockman_scott	Respond to of 89467

“Cleaning Up” Corporate Balance Sheets - A Start, But More To Go United States Daily Economic Commentary By Paul Kasriel Director of Economic Research Northern Trust December 16, 2002 northerntrust.com <<...As Chart 1 shows, nonfinancial corporations have dramatically slowed down the rate at which they are borrowing. On average in the four quarters ended Q3:2002, they borrowed at an annual rate of $88 billion. That's a far cry from the $400+ billion they were borrowing in the late 1990s. Nevertheless, the ratio of debt-to-assets of nonfinancial corporations remains very near post- World War II levels, as shown in Chart 2. Thus, corporate borrowing is likely to remain weak in the coming year. With pension fund contributions likely to be increasing and borrowing likely to be weak, how will corporations fund this rebound in capital spending the consensus is talking about? Maybe profits will surge? Perhaps, but not likely if household spending is slowing. Maybe corporations will issue equities? That will get a bull market rolling again, won't it? I believe that capital spending growth next year will be tepid at best as corporations continue to re-balance their balance sheets...>>