Albert Edwards: beware US corporate debt

The mountain of debt run up by US corporations leaves the economy very vulnerable to any disruption, says Societe Generale's Albert Edwards.

The US is looking vulnerable © Getty

Albert Edwards, global strategist, Societe Generale

One of the main justifications for the bull market in shares since 2009 has been the idea that “There Is No Alternative” (Tina), due to the fact that government and corporate bond yields have been kept so low by central banks over the years, notes Albert Edwards of Societe Generale. This notion that high equity valuations can be justified by low bond yields – in essence, that dividend yields on stocks should typically be lower than yields on bonds – took hold in the 1980s and 1990s, during which period it was indeed a “very stable and useful” valuation measure.

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