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Five Things You Need to Know: Cheap (With an Exclamation Point!)!; So Far, So Good; Zero Down, Levered Up; We're Really Pushing China's Buttons!, Three Words: Talking Urinal Cake


What you need to know (and what it means)!


Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Cheap (With an Exclamation Point!)!

Money is cheap, says BusinessWeek!

  • This week's cover story in BusinessWeek takes a look at the incredible benefits of cheap money!
  • Money is cheap, the magazine says, and according to some experts it could stay that way for years!
  • Incredibly, that's the third consecutive sentence we've concluded with an exclamation point!
  • Make that, fourth!
  • Ha, fifth!
  • We could go on, but you get the point; this is a bullish (sorry, we mean BULLISH!!!) story.
  • While the word "risk" is used five times in the 2,085-word story (hey, that's a ratio of .002%, almost the same level as the CBOE Volatility Index (VIX)), it is clear from the tone of the piece that the reporters had a tough time finding anyone willing to put a damper on the orgy of benefits surrounding cheap money.
  • Consider this sobering note:
    "Easy money is creating all sorts of economic benefits. Corporations are making capital investments again-and with their borrowing costs so low, profits are still zooming."
  • And this cautious comment:
    - "A combination of globalization, innovation, and good old-fashioned competition among markets has made it easier and cheaper to raise and deploy money."
  • Or this grim-faced, dire warning:
    "Borrowers now can draw funds from around the globe. And derivatives let financial institutions and traders manage their risks with mind-blowing precision."
  • Sure, it would be easy to read the BusinessWeek piece and think, "Wait a minute, in some ways, it's the 1990s all over again."
  • It would be easy to read the piece and think that because it actually says that in the eleventh paragraph: "In some ways, it's the 1990s all over again."


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No positions in stocks mentioned.

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