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Fund Managers Are Crying Out For Governments And Businesses To Invest

TedTed
in Fund Discussions
FYI: Fund managers are begging for someone — anyone — to increase investment spending.

That's the primary takeaway from Bank of America Merrill Lynch's monthly survey of money managers.

A net 48 percent of investors surveyed thought fiscal policy was too tight around the world (that's a record proportion who espouse that view), while 56 percent said they wanted companies to boost capital spending — a rise of 10 percentage points over the past four months.

A net 69 percent of those surveyed say that businesses aren't investing enough, which is close to the record level for this survey.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-08-16/fund-managers-are-crying-out-for-governments-and-businesses-to-invest

Comments

  • Edmond
    Sovereign indebtedness has continued to increase since the 07-08 crisis. Much of that used to boost ongoing consumption until the economy returns to "old normal" growth rates (which is just not happening). Govts have 'carried the ball' for almost a decade now, with respect to fiscal deficits.

    And QE/ZIRP & now NIRP in some geographies have created created conditions which SHOULD have lowered the IRR hurdle with respect to investments by the commercial/business sector. But instead, businesses seem to prefer to divert their cash-flows to investors in the form of divds and cash-buybacks. Money spent rewarding shareholders today, is money not invested to create jobs tomorrow.

    With respect to US-domiciled businesses, they've used accounting gimmickry (primarily transfer-pricing shenanigans) to move accounting profits and cash offshore.

    Tax policy could probably be used to disincent financial engineering in favor of physical investment, create tax revenues which fund govt infrastructure projects, and to bring all that overseas cash back to the USA.

    But I wouldn't hold my breath.
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