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Walter Thompson Company for $566 million in 1987 and Ogilvy for $864 million in 1989 — big acquisitions that stretched the company’s balancesheet. Strength of productivity program. This means improving productivity at a rate sufficient to put you in at least the top 30% of your industry.
It reminds me of the 2006/07 period when falling US house prices and then widening corporate bond spreads were totally ignored by upbeat equity investors until it was too late. It it is worth noting just how aggressive the BoJ has become with the central bank balancesheet already at around 55% of GDP and rapidly heading higher still!
It is continuing to expand at twice the rate of nominal, or money, gross domestic product, and according to official data has pushed the credit to GDP ratio up to 215 per cent in 2013, and most likely more. But it is hard not to conclude that the authorities remain conflicted.
This is a problem because it forces households and businesses to divert energy away from productive activity and towards managing and avoiding the cost of inflation. Countries may experience hyperinflation, which means rapidly rising consumer prices. While focusing intently on consumer prices, central banks tend to ignore rising asset prices.
Fed BalanceSheet vs. Stock Market; Will QE Cause Inflation? Fed BalanceSheet vs. Stock Market. The risk premiums of risky securities have become unsustainably compressed in the process, and the Feds balancesheet has metastasized to $3.5 Fed BalanceSheet vs. Stock Market; Will QE Cause Inflation?
The most important effect is likely to be on demand for wealth management products. But one way or another we do have to write down the huge hidden losses in the country’s balancesheet, and this will mean not a collapse but rather many years of Japanese-style slow growth as the system grinds its way though its excesses.
And long-term rates are what matter for capital investment, which is key to increasing the economy’s growth potential and raising productivity.". From 2003-2006 the Fed ignored major bubbles in home prices, then commercial real estate. Inflation Benefit 3 (?): "Balancesheet recession" might go away! What Baum Left Out.
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