The peak interest rate era is over. Here’s what investors are watching.
Investors are watching what they should be watching and this is management.
Investors are watching business administration and corporate management, which adapt to the contemporary economic environment of inflation, security risk, climate change, social, political and other crisis.
Where companies can no longer rely on government subsidies, monetary easing programs (QEs), low, zero or negative interest rates, comfortable and easy liquidity, “helicopter money”, guaranteed appreciation of stock prices and corporate capitalisations in the international stock exchanges, privileged taxation, private equity funds, market concentrations with M&As, short-term speculations, uneconomic or corrupt policies, extremist deregulation, absence of supervision, limited or non-existent market competition, trusts, monopolies, special interests, cosy networks and cartels, market exploitations and manipulations, price fixes and exorbitant remunerations to managers for substandard or no performance for real value.
This environment is harmful, unsustainable and for this reason, gone. Risks have increased, capital, resources and costs are priced, including environmental and climatic costs, money has become more expensive and finance in debt or equity is provided under strict financial conditions and high standards of investment and management. The financing criteria for value, revive the standards of efficacy and efficiency in the business administration and in the operational, commercial, financial and overall economic management of the companies. This means in the modern and sound governance, the legal diligence and the real financial performance for value.
The reprice of the value of capital and resources and the rise in the cost of money by way of interest rates, underscores, this precise change of economic and administrative dimension. Which focuses in the transformative input – output function of business and corporate organisation and management. Markets are liberated and regulated, trade is recalibrated, investment reoriented and free market economics reclaim their literal linguistic meaning.
This issue is economic. The soft or hard landing is clear and concise choice, which rests with the corporate and financial administrations and managers. As is the gear up for take off.
The rest is literature, fictional and historic.
