Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: FiveFour who wrote (15018)	11/7/2004 11:42:00 AM
From: GraceZ	Respond to of 116555

I would think that is typical in the early stages of a recovery Yes, it is. part of the reason that spreads have narrowed in junk debt in anticipation of lower default risk Agreed, the credit cycle bottomed some time ago. The underlying question is whether the US is really in a sustainable recovery or whether recessionary /deflationary pressures will overwhelm Nobody knows so I'm positioned for either. Since my business has survived several recessions and a major technological shift I expect to last through the next calamity, as well as help my clients weather whatever comes. I find booms harder to deal with then slow periods. While it is heady to have your top line explode it is almost always accompanied by expenses which are rising faster. You find yourself borrowing in a boom and you have to spend a lot of time collecting from customers because the same thing is happening to them. In a recession or slow growth period you tend to make sure you have more than adequate cash flow before taking on any new expense and pay down debt. Considering that C&I fell for 3+ years and only recently turned back up, we've had an unprecedented debt pay down in the corporate sector. economagic.com