Janet Yellen chickened out, so these ‘living dead’ firms will go on, but they might not make it past December…
What a shock – the Fed didn’t raise interest rates last week. Its next chance is in December – we’ll see if it chickens out then, too.
You can count on markets to obsess over the possibility of a rate hike for the rest of the year. Anything to keep the free money hose on full blast.
But this obsession with rate hikes means the markets are missing a critical component of the big picture – corporate credit quality. It’s really in horrible shape, but eight years of zero interest rates have helped to disguise that fact, and these companies aren’t advertising it to shareholders.
This post was published at Wall Street Examiner on September 26, 2016.