Huh? Compared to what? “Despite the superficial health of both profits and cash flow (these a touch less impressive if we adjust for either of the US dollar’s internal or external loss of value, one should constantly remind oneself), it is apparent that the balance sheet is still being strip-mined to salt the income statement and, more particularly, the per share ratios via debt-financed equity buybacks. Even as this increases the overall fragility of the corporate structure, however, the Fed’s egregious obliteration of capital market pricing signals has kept equities looking ‘cheap’ – with dividend yields anomalously above an artificially-depressed LIBOR and equity earnings yields at par with QE-shrunken corporate bond yields for the first time in almost three decades.
This will not end well.