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Chart Of The Day: The DV01 Time Bomb Beneath The World's Equity Tranche

Tyler Durden's picture


While everyone is very familiar, and at times hypnotized, with the plain vanilla equity chart of stock prices which at least in the US are near all time highs, and where the small-cup Russell 2000 - long the object of Bernanke's affection - is already at never before seen levels, one chart virtually nobody has seen, perhaps the most important chart for the global capital markets right now, is the following from Goldman, which shows that while outright market cap for the G7 countries (ex basket case Japan) is near all time highs courtesy of the $15 trillion in liquidity pumped by central banks, the ratio of equity market cap to the outstanding value of debt securities underlying this equity is near all time lows!

Or, as shown another way by Deutsche Bank, the ratio of the equity tranche to all the other debt in the system is problematic to say the least:

Why are these two charts so important? Because while the bulk of equity speculators and algos out there are at best familiar with the concept of Price to Earnings, the reality is that P/E is a trivial indicator designed to fool the gullible into some anchored perspective of relative pricing, be it cheap or expensive. The reality is that for a full grasp of valuation, one must always look at the consolidated valuation metric given by Enterprise Value, which is the sum of market cap and net debt, to some metric of cash flow, either EBITDA or Free Cash Flow (EBITDA - CapEx), especially since unlike Non-GAAP adjusted "earnings", which are whatever the accounting firms makes them be to beat estimates, free cash flow is always what it is: cash the company makes, or as has been the norm lately, loses.

In other words, most forget that equity is just one half of the valuation equation. Or, as shown above, far less.

And what is even more important, is that preserving the equity tranche, which despite Bernanke's endless manipulation of every risk asset, needs ever more and more cash flows to keep the value of the debt below the equity tranche whole. Because we are confident that even the most naive investors understand perfectly well that when debt is impaired, the equity value above it is zero.

And here lies the rub: to preserve the value of the debt, and thus preserve the illusion of the overvalued market, the global financial markets need to constantly generate more and more cash flows just to keep up with this burgeoning debt

So what happens in a rising rate environment? Well, the debt, which like total sovereign debt will hardly ever be repaid and at best be rolled over (in an ever-higher interest rate environment), will demand more and more of the cash to go toward satisfying interest obligations beneath the equity tranche, leaving increasingly less for equity. The hope by the central planners is that as rates rise, and as inflation quickens, there will be more cash going out to consumers, who in turn will generate greater cash inflows. But the problem with this is that should the animal spirits indeed return, and the Fed's balance sheet can be unwound, then equities will collapse due to the simple obliteration of the abovementioned $15 trillion in government created money, before the real virtuous cycle can resume.

But before any of that happens, the DV01 time bomb contained in the world's balance sheet will first go off, as suddenly what little market participants finally remain do look at the chart above and realize that no incremental value creation will go to the equity tranche, with debt satisfaction taking up all of it. This simplified analysis also completely ignores that cash flows will implode once companies, who have delayed replenishing the asset bases with capex spend, can no longer afford to spend on organic growth and invest in themselves, resulting in even less cash going to debt, and certainly equity.

Finally, the reason everyone has ignored this chart is because in a ZIRP environment, the amount of marginal debt payments is negligible. However, once the much sought after "rotation" does indeed begin, and rates start creeping higher, suddenly the question of debt interest payments will once again become oh so very critical.

Until then: enjoy central planning.


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Fri, 02/15/2013 - 16:56 | 3247703 thismarketisrigged
thismarketisrigged's picture

i am about to puke. how the fuck is this market all the way back from its lows in such a short time? heck we may finish green today, excuse while i fucking puke how disgusting this is

Fri, 02/15/2013 - 17:01 | 3247723 DoChenRollingBearing
DoChenRollingBearing's picture

Ratioz, bitchez.  Buying bonds now, finally, seems like a disaster, although that notion has been wrong for years.

Fri, 02/15/2013 - 17:04 | 3247732 Babushka
Babushka's picture

Sorry for being completely off topic but does anybody know what happened to this guy Chris Dorner? It seems there is no news!

Fri, 02/15/2013 - 17:09 | 3247738 francis_sawyer
francis_sawyer's picture

burned beyond recognition... TRUST US... [because we also killed Bin Laden & gently eased him into the Indian Ocean wrapped in fine linen, under 'Sharia Law' principles, after being scented in frankinsence & myrrh]...


Please return to your home in an orderly fashion... We're the government & we're here to help...

Fri, 02/15/2013 - 17:17 | 3247774 redpill
redpill's picture

LAPD decided to bury him at sea in case he was a muzzie, not that muzzies actually do that anyway.

Fri, 02/15/2013 - 17:19 | 3247779 Manthong
Manthong's picture

Nothing to see here.. move along.

Fri, 02/15/2013 - 17:48 | 3247855 CJHames
CJHames's picture

Funny how everything burned beyond recognition except for his (apparently) fireproof CA drivers license.  How convenient.

Fri, 02/15/2013 - 18:32 | 3247991 fuu
fuu's picture

I am still trying to figure out why you carry an ID after you have declared war on the cops. Not like you are going to need it if you get pulled over for speeding, either they are shooting you or you are shooting them.

Maybe he just needed beer and smokes.

Fri, 02/15/2013 - 18:48 | 3248010 francis_sawyer
francis_sawyer's picture

Wal_Mart will card you at age 40+... Just so you know that IF you happen to be a 'fugitive' ex-LA cop on the run & you want to walk into a maxi-mart full of bubble cams on the ceiling, you know which hand(s) you need 2 use to hide your possible facial ID from...


As for DORNER... He OBVIOUSLY tossed it out of his pocket [in the same way the 9/11 terrorists did, by tossing their passports out of the agape windows of jet airlines travelling at 500+ mph just 'milliseconds' before they impacted the TRADE TOWERS & erupted into fireballs]...

You obviously have ZERO understanding of the laws of PHYSICS...

Mon, 02/18/2013 - 08:32 | 3252593 WTFRLY
WTFRLY's picture


That will be the robo-message playing over loudspeakers as martial law provisions are exercised after the "just-in-time" grid collapses, or hiccups.

Fri, 02/15/2013 - 17:07 | 3247741 nobusiness
nobusiness's picture

A Drone killed him

Fri, 02/15/2013 - 17:10 | 3247750 Babushka
Babushka's picture

How bizarre....

Fri, 02/15/2013 - 18:40 | 3248011 Rogue Trooper
Rogue Trooper's picture

I'm partial to the theory that once the media in choppers where told to clear the area "for their own safety" a special black team went in and eliminated him (or put in some 'body'), lade down the fuel to start the 'fire', then the media are allowed in and the show begins with the local swat team.  Funny that, considering how much ammo they claimed he was packing, there where no rounds going off on the resulting heat from the blaze (check vid).  Also, the story makes no fuckin sense, since when was tear gas flammable and why blow out the windows? They where pumping mega rounds (check the vid) into the building and windows so how was he able to wire up the house to go up like a roman candle.  This needed fuel, wiring, and much care.... he must have been real good - a black Jason Bourne! The iceing on the cake was that 'indestructible' drivers license.

The OpPlans looked good on paper and in the MS Project/Powerpoint presentation before authorization in the (Oval?) office but the exercution was somewhat lacking.  It would have failed as a movie script.... not plausible.

See y'all in hell Bitchez.. cause the shit storm is coming.



Fri, 02/15/2013 - 17:25 | 3247794 Al Gorerhythm
Al Gorerhythm's picture

The most precient and under-reported investment info out there slapped in your lap and.............. Oh, look, the Kardashians are buying a new puppy. 


Fri, 02/15/2013 - 18:42 | 3248015 francis_sawyer
francis_sawyer's picture

What I heard was tha the puppy was pregnant... You're ovvvviously a social networking LOSER...

Fri, 02/15/2013 - 17:37 | 3247822 Canucklehead
Canucklehead's picture

I thought Congress was holding up Chris Dorner's appointment to be the Secretary of Defense until after the recess.  I believe he will be in Washington at that time.

Fri, 02/15/2013 - 18:19 | 3247955 BigJim
BigJim's picture

Hey Tyler!

This is OT too but maybe worth a post:

Fri, 02/15/2013 - 19:42 | 3248163 pitz
pitz's picture

Exactly.  And missing from that chart are the PM's -- currently worth, what, about $8T worldwide?  At the other extreme of the cycle, I expect that most of the funds that are currently allocated to bonds, will eventually end up being PM valuations.  Since the quantity of PM's is relatively finite, that implies $156T of valuation being expressed as PM's rather than debt. 

A simple ratio of $156 / $8 = ~20, which gives us $32,000 gold.  So keep buying bitchez.  Its motherfucking religion.

Fri, 02/15/2013 - 17:39 | 3247829 pitz
pitz's picture

The market is nowhere near back from its lows.  Share owners have still lost massive amounts of value in the past 5 years and even over the past decade.

Fri, 02/15/2013 - 17:52 | 3247877 Doomer
Doomer's picture

Kinda depends on how one defines "the market".  I don't think survivorship bias is much of a factor in the Dow or S&P 500; however, you do make a good point, if I understand you correctly.

Fri, 02/15/2013 - 17:00 | 3247704 francis_sawyer
francis_sawyer's picture

I thought it was "PROFIT TO EARNINGS"... I guess now I'm going to have to re-bury myself in the charts now to make sense of it all... I wish I hadn't slept so much during that last semester at Wharton... Before I proceed, I have an important question... Does that DEBT TIME BOMB apply to 'all' 57 states?...

Fri, 02/15/2013 - 17:35 | 3247818 Joe Davola
Joe Davola's picture

No, states cannot run deficits - unless you include unfunded pensions.  Oh, wait - they're counting on 8% returns on their investments forever to fix that little problem.

Fri, 02/15/2013 - 17:52 | 3247876 Melin
Melin's picture

Zero thinks there are 58, not 57 states.  Remember, he had "one more to go."

Fri, 02/15/2013 - 18:44 | 3248022 francis_sawyer
francis_sawyer's picture

I dunno... The HNX deal has me all mixed up...

Fri, 02/15/2013 - 16:59 | 3247713 nobusiness
nobusiness's picture

What?  Walmart said domething bad?  Can't be the market is only down a buck or two.  I am sure that if the largest retailer in the world was having trouble with sales the market would react.  After all the efficient market theory says it must.

Fri, 02/15/2013 - 17:00 | 3247717 davidsmith
davidsmith's picture

This assumes that the United States Government does not absolutely control the stock market.  The United States Government absolutely controls the stock market.

Fri, 02/15/2013 - 17:01 | 3247719 TruthInSunshine
TruthInSunshine's picture

What's the big deal? The Fed has an awesome set of tools and can fix this through FASB or some other such thing.

Seriously, the Fed can monetize all debt instruments, parse them out for free to select financial institutions, have them mark-to-fantasy, and roll with it.

Proposal Gives Banks More Freedom to Value Assets

Published: February 14, 2013



Long live the Ponzi.

If they'd extend this "freedom" to individuals, think of the credit boom that would result. You'd have 18 year olds obtaining loans for their "higher education," a new C7 Corvette AND a new McMansion based on their self-reported valuation of that Darryl Strawberry rookie baseball card they've pledged as collateral for said loan.

Fri, 02/15/2013 - 17:37 | 3247823 centerline
centerline's picture

mark-to-"whatever looks good on paper" here we come!

I say do it.  All the damn way.  Give em' everything.  Crank up the leverage.  Get rid of all regulations.  Dissolve the SEC, etc.  Full speed ahead... warp factor 10!  

Fri, 02/15/2013 - 18:47 | 3248024 hooligan2009
hooligan2009's picture

bernanke and the brokers "you are covered" version

Fri, 02/15/2013 - 17:52 | 3247878 Panafrican Funk...
Panafrican Funktron Robot's picture

So, basically, the final nail in the coffin on mark-to-market?  Long FAS, amiright?

Fri, 02/15/2013 - 17:54 | 3247883 Bunga Bunga
Bunga Bunga's picture


Fri, 02/15/2013 - 17:02 | 3247725 youngman
youngman's picture

Finished Green.....WTF....just amazing....someday this will all be know how they do it...or did it...its not money changing hands..its electronic bits..

Fri, 02/15/2013 - 17:41 | 3247835 helping_friendl...
helping_friendly_book's picture

It is truly depressing because it gives the drones on Bloomberg and CNBC fodder to keep them relevant.

Fri, 02/15/2013 - 17:03 | 3247727 nobusiness
nobusiness's picture

Wow!  It took the fed buying 130,000,000 SPY shares today to keep the market close to break even.  At least that was the increase volume from either Monday tueday wednesday or thursday's volume

Fri, 02/15/2013 - 17:44 | 3247843 helping_friendl...
helping_friendly_book's picture


That is how they do it.

Notice the S&P 500 dives until the London market closes. Then Kevin Henry gets to work pumping it up until close.

makes me want to puke.

Fri, 02/15/2013 - 17:54 | 3247885 Panafrican Funk...
Panafrican Funktron Robot's picture

Flat or up markets = VXX negative = XIV positive.  Long XIV, hedge with cheap SPY puts, win at life in the casino.  

Fri, 02/15/2013 - 17:04 | 3247733 Yen Cross
Yen Cross's picture

 These markets belong in the funny pages of the "Sunday N.Y. Times"...

Fri, 02/15/2013 - 22:17 | 3248538 Clowns on Acid
Clowns on Acid's picture

The daily Krugman cartoon....

Fri, 02/15/2013 - 17:05 | 3247736 Obama4Ever
Obama4Ever's picture


What is this rising rate environment you speak of? I don't believe in such ridiculous fantasies. The unfolding scenario you paint is implausable.

Fri, 02/15/2013 - 17:07 | 3247740 falak pema
falak pema's picture

the icing on the cake and the cake itself.

To understand the situation in french banks as an example :

The current french BS of 4 major banks are at 8 T Euros, aka 4 times french GDP. So there is awesome debt destruction potential there as those BS are virtually all debt; equity being less than 3%. And they are totally involved in incestuous intra bank deals.

Out of the current credit flow generated by french banks, 10% goes to service consumer loans, 12% to service corporate entrepreneurial loans and the rest : >78% are used to service the banks OWN financial risks including debt servicing. That is how much of the french banking sector's resources are absorbed in its own financial shenanigans which are all marked to model and opaque; as its all derivative related and OTC type stuff. 

Lets see them deleverage out of that with a flat economic scenario in 2013/2014. 

Sat, 02/16/2013 - 11:06 | 3249313 andrewp111
andrewp111's picture

Nothing will be deleveraged. Draghi will just buy and loan whatever he needs to, so none of these banks fail, just like he did in Spain. Most EU banks are TBTF, and are treated accordingly.

Fri, 02/15/2013 - 17:08 | 3247746 americanspirit
americanspirit's picture

The reason that government debt will never be repaid is that governments don't create wealth, they only tax it. "Full faith & credit" only works if someone is creating real wealth. Government is simply a vast criminal conspiracy that dwarfs all other kinds of criminal conspiracies. (Except perhaps organized religion.) Government creates nothing - it only takes, uses and destroys.

Fri, 02/15/2013 - 18:04 | 3247914 Doomer
Doomer's picture

I'll give them credit for building roads, but that is about it.

Unfortunately, the other main responsibilty of the government, the national defense, has turned into global police force full of pork, guided by dubious objetives other than defense.


Fri, 02/15/2013 - 17:14 | 3247764 11b40
11b40's picture

As I said in 2009, this can't go on forever.

As I said in 2010, this can't go on forever.

As I said in 2011, this can't go on forever.

As I said in 2012, this can't go on forever.

As I now say in 2013, this can't go on forever, can it?

Fri, 02/15/2013 - 17:51 | 3247872 helping_friendl...
helping_friendly_book's picture

I have been short the S&P 500 since Oct. 2011.

Fri, 02/15/2013 - 18:43 | 3248021 hooligan2009
hooligan2009's picture

like the blonde falling from the 65th floor far, so far, so good...

Fri, 02/15/2013 - 19:52 | 3248183 orez65
orez65's picture

There is just a lot of wealth in the United States.

It takes a while to destroy it all.

Fri, 02/15/2013 - 22:15 | 3248534 Clowns on Acid
Clowns on Acid's picture

The answer is no, because Obama and his fellow Alinskyites have overreached. The new tax structure increases, regulations, class warfare rhetoric, and outright corruption on a scale since the TeaPot Dome scandal. The MSM, being filled with feckin' moronic Alinskyites are covering the real scope of the corruption and sleazyness. Don't even come close to GWB's supposed Iraq War corruption (halliburton etc..).

The reason why this has continued so far is the outright immorality (some have called it treason) of Ben Bernanke with his QE 1,2,3 to infiniyt (including bailing out European banks on US taxpayers back).

However even Benernake at this stage can't keep the collapse of cash flow afloat with USD losing Int'l status.

The Fed and banks will be manning the lifeboats soon (probably at night). Notice all the banks cutting staff furiously this Quarter yet? They know its coming this year.  

Fri, 02/15/2013 - 17:14 | 3247766 delivered
delivered's picture

The charts are informative but not complete. They need to be expanded to include all forms of debt such as currencies (which are a form of debt), derivatives, etc. Then we can get a true picture of the real leverage in the system.

But the main point is loud and clear. When debt service payments, principal and interest, begin to increase (as lenders really begin to ask for their money back), cash flows will absolutely be destroyed. To date, all we have had is debt being transferred from individuals and banks to the Fed and government to keep the system a float. Nobody has really repaid anything as it has either been written off (think mortgages and soon to be student loans) or pass around to sit on someone else's balance sheet. Can you imagine if the US Government actually had to start repaying debt (instead of not adding incremental layers). FUBAR is about the only word I can think of that would describe this.

Fri, 02/15/2013 - 17:15 | 3247768 Yen Cross
Yen Cross's picture

 Right after the markets close CFD's go negative. What a fucking joke!

Fri, 02/15/2013 - 17:22 | 3247785 Manthong
Manthong's picture


Capex, shmapex..

When people can’t afford a Big Mac or an every-day-low-price roll of Chinese toilet paper at Wallymart, it’s game over.

Fri, 02/15/2013 - 17:28 | 3247799 Al Gorerhythm
Al Gorerhythm's picture

Wallymart report suggests they can't.

Fri, 02/15/2013 - 17:30 | 3247797 centerline
centerline's picture

Cash flow.  It's all about cash flow.

Edit: what would cause rates to creep higher?  Realistically, this can never happen unless the intention is to pound the final nail into the middle class coffin.


Fri, 02/15/2013 - 17:35 | 3247817 rsnoble
rsnoble's picture

Let's talk about something more entertaining like how all elite residents had their phone lines severed because Bush and Cheney are calling them 15x a day and leaving obscene messages like "Heh motherfucker I thought you said we could pull this off and I'd be safe!!  I can't even leave the goddamn country you bastards!!!".

Which is really sad that Bush can still step onto a ballfield and have thousands of mindless sheep cheer "duh we like him he from Texas!"

Thank god for the internet helping to spread the word because there sure are some stupid motherfuckers in this country and in mass qty and that's exactly how they get away with this shit they water down the rest of us.  Yep, we're crazy because we can fucking think.

Fri, 02/15/2013 - 17:40 | 3247832 rsnoble
rsnoble's picture

Which reminds me im just gona have to put the bottle down more often so I can get this solar unit and my 3D printer put together.   An individual can now acquire huge amounts of technology on the cheap and as far as im concerned as our overlords go........we don't need you anymore!  Now with cheap robots and 3D technology even someone like me can build a fucking drone in my barn.  Touche motherfuckers!!

Fri, 02/15/2013 - 18:17 | 3247950 Manthong
Manthong's picture

My home project will have an 8-track.

Fri, 02/15/2013 - 17:38 | 3247825 pitz
pitz's picture

That's a rather simplistic analysis.  A collapse of value of the debt portion of the capital structure would allow for an expansion of the equity portion.  After all, credit contraction implies higher interest rates, and higher interest rates imply a loss of value for debt.  Accordingly, quite the opposite of what the author suggests occurs -- a loss of value of debt is accretive to equity, especially for firms with balance sheets that have duration > 0.

Additionally, less debt restricts the formation of industrial capacity, thus creating and reinforcing a feedback loop of inflation.  Until all that remains is equity. 

IMHO, the chart more accurately should have cash/bonds/debt at one end of the continuum, and precious metals at the other end of the continuum, as being junior to equity.  In deflation (ie: what we've had over the past 30 years), debt expands, and the PM's contract.   In inflation, (ie: what we're going to have over the next 30 years), debt contracts, and the PM's and equity expands. 

Fri, 02/15/2013 - 17:41 | 3247837 rsnoble
rsnoble's picture

Yeah ok Sheldon.

Fri, 02/15/2013 - 19:34 | 3248137 pitz
pitz's picture

That's not my name, but I am a SUKI (tm) member.  Member of a major international religion.

Fri, 02/15/2013 - 22:02 | 3248488 Clowns on Acid
Clowns on Acid's picture

no its not....

Fri, 02/15/2013 - 22:03 | 3248492 pitz
pitz's picture

Yes it is.  Go take a course in religious studies at your local high school if you aren't educated in this topic.

Fri, 02/15/2013 - 17:41 | 3247836 Nid
Nid's picture

It's nothing a little bit of Multiple Expansion can't fix....

Fri, 02/15/2013 - 17:44 | 3247844 techstrategy
techstrategy's picture

Tyler, as an entrepreneur I have been telling people that stock market investors are going to learn what most entrepreneurs have experienced painfully at one point in time or another -- preference/seniority stacks...  There is no net equity in the world anymore.  And, governments with taxing authority are senior claimants to equity holders, so none of this really matters.  

Can you encourage the folks at Nanex to look at the Amazon tape?  There are so many anamolies it is insane.  AAPL (and now WMT) are being used by the option scalping algos to further break the market...  I have something for you on the Amazon/Apple trade in case you haven't noticed yet.  Will email you... I think you'll enjoy having at this one.

Fri, 02/15/2013 - 19:32 | 3248132 pitz
pitz's picture

"There is no net equity in the world anymore."

Hardly.  Its the debt side of the balance sheets that is inflated.  Once the debt is deflated, then there is plenty of equity.  Imagine if your heavily indebted utility, factory, etc., had its (long-term) debt evaporate, especially if the debt is at relatively high interest rates.  Debt expansion has been very negative for equity, hence, debt contraction will prove to be very positive.

"And, governments with taxing authority are senior claimants to equity holders, so none of this really matters. "

Then we get a Weimar Germany sort of hyperinflation if governments apply such levels of punitive taxation, as people simply won't invest, producers will stop participating in an economic system that steals their productivity, and will people hoard things like gold instead.  This is a possibility.  Cash or bonds won't be worth anything either in that scenario. 


Fri, 02/15/2013 - 17:47 | 3247853 ebworthen
ebworthen's picture

Central Banker bubble to benefit the banks and corporations and rape the middle class once again while enriching the elites and keeping the lower classes quiescent with bread, beer, and circuses (media).

Fri, 02/15/2013 - 17:48 | 3247859 n.d.v.
n.d.v.'s picture

"So what happens in a rising rate environment?"

What is this mythical beast of which you speak?

Fri, 02/15/2013 - 17:56 | 3247890 Catullus
Catullus's picture

ZIRP 4eva!!!

Fri, 02/15/2013 - 17:57 | 3247897 ebworthen
ebworthen's picture

P/E Ratio = Ponzi/Easing Ratio

Fri, 02/15/2013 - 21:41 | 3248414 mt paul
mt paul's picture

debt is


Sat, 02/16/2013 - 01:10 | 3248848 hamstercheese
hamstercheese's picture

Correct me if I'm wrong here, but here's another messed up issue regarding debt going bad...If my corporation issues, say, $ 10 million in debt, I'll show $ 10 million as a liability on my balance sheet.  Let's say I get downgraded and those bonds, trading in the public space, now become market valued at $ 9 million.  Guess what...the next reporting period I can book that as a $ 1 million gain because now I only need $ 9 million in cash to pay off my own debt by buying the debt back at market value.

Sat, 02/16/2013 - 01:42 | 3248869 pitz
pitz's picture

You're not wrong at all (although you might be on the accounting of it).  Additionally, if issuing new debt costs you more (the implication of a devaluation of existing debt), its also going to cost your potential competitors more.  Hence, the formation of new competitors is likely to be minimal, if not non-existent in a rising rate environment.  Hence, your pricing power goes up, margins go up, etc. 

Which is why I think the thesis of the author of this article is a bunch of bunk.  Higher rates imply a destruction of debt, and a destruction of debt is very good for equity (and the precious metals). 

Sat, 02/16/2013 - 09:20 | 3249161 Downtoolong
Downtoolong's picture

Once again, we the wealthy and those on Wall Street who primarily work for us would like to thank all you poor dumb schmucks who were forced to fund this wealth building and wealth transfer extravaganza for us.

You will forever be in our debt.

Now, which one of you Muppets is ready to step up and buy my expensive stock? Come one, you know you want to. If you don’t do it, the Fed will probably do it for you eventually anyway.

Sat, 02/16/2013 - 10:59 | 3249305 andrewp111
andrewp111's picture

If the Corporations have refinanced with long term, near-zero rate bonds, why is any of this a problem? If they lock in their interest rates at rock bottom levels for 10-30 years, a rising rate environment will be good for business. Of course, if all your debt is short term, you are totally screwed by rising rates.
