Friday , July 28 2017
Home / FT Alphaville / The capex call, reconsidered and re-upped, hopefully with more success this time

The capex call, reconsidered and re-upped, hopefully with more success this time

Summary:
“We couldn’t help but notice our inbox’s recent accumulation of economist and analyst notes predicting a healthy pickup in capex this year. We do find the case mostly convincing. But this recovery has made all predictions of accelerating growth look foolish, and quite a bit of humility about this one is appropriate.”I wrote those lines in March 2014. Good thing I added the caveat about humility because everyone was dead wrong, as capex and business investment overall continued to lag right through the autumn of last year.*(Source: 2017 Economic Report of the President.)Recent notes from Deutsche Bank and Goldman Sachs have spotted anew the favourable circumstances for US capex, using most of the same arguments as before: the capital stock is old, borrowing is cheap and easy, corporate

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“We couldn’t help but notice our inbox’s recent accumulation of economist and analyst notes...

Cardiff Garcia
Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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