four ws of a leveraged economy
The municipal be d market:
< A Billions of dollars
Data: Bond Buyer, BW est.
The financial plight of U.S. corporations
Debt piles up faster
than equity...
Equity per $1 of debt,
manufacturing
corporations
2.0-
J L_J_J L
1964 '66
ADollars
'63
I i-L
’72 6/74
Est.
1964 ’66
A. Percent
72 6/74
Data: Securities & Exchange Data: Federal Reserve Board, BW est.
Commission, Federal Trade Commission
•Pretax income plus interest Est-
expense divided by interest expense
Data: Internal Revenue Service,BW est.
... and the liquidity
strain is worsening
A Percent
Data: Salomon Bros., Manufacturers
Hanover Trust Co.
Mario De Vincent!s—BW
I
I
The corporate borrowing binge
1964 ’66 ’£8 70 72”
j Long-term debt represents bonds, mortgages;
short-term debt represents bank and finance
company loans, commercial pap«r, bankers’
acceptances, government loans
'Seasonally adjusted annual rate
Data: Federal Reserve Board
Ndi cash borrowed by
nonfinancial corporations
Mario Lie vmceruis—BW