The markets have been used to central banks actions that mitigate downturns (the famous/infamous puts that take the names of central bankers such as the Greenspan and Bernanke puts). Such actions actually induce risk taking, making the tail of outcomes and returns...

The external debt of developing economies has more than tripled in the last ten years. Brazil of all countries is selling notes to yield-hungry investors that mature in 2047! Where is the rationale to buy 2047 notes in a country whose current deficit exceeds 10% of...

In last week’s commentary we pointed out that the accumulation of debt by corporations may be behind the market upswing (through shares buyback programs while the fundamentals do not support such uptrend). The fact that yields on sovereign and corporate bonds have...

Corporate debt is at record high. Net equity issuance has been negative for the last few years. The shares buyback pattern is simply staggering. The fact that almost 70% of corporate earnings are paid out in the form of corporate buybacks and dividends is antithetical...

The extraordinary global increase in the debt-to-GDP ratio requires a growth rate of at least 4% in order for the debt to be sustainable. The unfortunate thing is that such growth rate looks unrealistic given today’s economic fundamentals. Moreover, the earnings...