Hi Fellow Monkeys,
I have been reading a lot in recent headlines about the possibility of US treasuries going negative. PIMCO has indicated that this is something that may happen within the next five years. I am curious to hear people's opinions on how this will transform the M&A environment / corporate lending in general. Any questions/ insights would be helpful.
Cheers lads!
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My opinion is that negative interest rates will come to the US within the next two years due to high chance of a recession. M&A / corporate lending will probably deteriorate as business investment spend is actually negative now and will get worse depending on where the economy goes.
Too much uncertainty in this environment and the fed has very little firepower left to get us out of a recession. Globalization trends are reversing, taxes will likely have to go higher due to the US running a massive deficit at the peak of the cycle (which is unheard of), and corporate profit margins have no more room left to run.
Those shops that will do okay'/well are the ones with strong restructuring arms (Lazard / PJT / Houlihan / etc.).
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