Thursday, August 6, 2009

Leverage and the Economy

Comstock Partners is out today with a Special Report, Deleveraging the U.S. Economy, which has a variety of long-term charts from Ned Davis Research of interest to many observers of the financial scene. Highly recommended.

If the debt deflation theory is to play out as a reduction in net debt in the economy, this will be a Good Thing overall but will bring lots of equity supply to the economy. Will it be good for the "economy", the stock market, etc.? Long-term: yes; short term: trend changes are choppy.

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