following up on my heads up re US10T's yesterday:
http://www.zerohedge.com/news/2013-0...derly-rotation
The bottom line is: if firms are unable to borrow cheap to fund the buybacks and dividends that investors have become so enamored with (and conditioned to); a disorderly rotation from rates will in fact have a major negative on equity prices as capital costs surge making shareholder-friendliness uneconomic... considering by far the greatest aspect of EPS beats has been a reduction in the float via buybacks, the fear should be that the much-hoped-for rising rate scenario (lauded by so many as indicative of great things ahead) is in fact nothing but flow-driven abd will crush EPS
http://www.zerohedge.com/news/2013-0...derly-rotation
The bottom line is: if firms are unable to borrow cheap to fund the buybacks and dividends that investors have become so enamored with (and conditioned to); a disorderly rotation from rates will in fact have a major negative on equity prices as capital costs surge making shareholder-friendliness uneconomic... considering by far the greatest aspect of EPS beats has been a reduction in the float via buybacks, the fear should be that the much-hoped-for rising rate scenario (lauded by so many as indicative of great things ahead) is in fact nothing but flow-driven abd will crush EPS
90% of people, are wrong about 90% of everything, 90% of the time...