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Newsletter Notes Pre-Crash Pattern Repeating in Corporate Debt

May 2, 2017 (EIRNS)—Another stock newsletter, looking at Federal Reserve data, has noted that U.S. corporate debt is in a pre-crash situation. "Theotrade" comments,

"[R]ight before the financial crisis, debt was issued to fund a massive amount of buybacks. History is repeating itself as the current corporate debt issuance is almost as high as 2007 and the current net equity issuance is almost as low as 2007. This chart shows the debt bubble in its glory."

As EIR reported May 1, there has been an absolutely extraordinary explosion of at least $7 trillion in new debt of non-financial corporations just since 2010, an increase of more than 75%, while equity—capital—of these companies has declined by $3 trillion due to their "financial engineering" with the debt. This repeats the speculative pattern from the beginning of 2004 to the end if 2007 precisely, as the newsletter shows.