Podcast #7: Fat Cats and Starving Dogs
Podcast #7: Fat Cats and Starving Dogs

Short and concise analysis on concepts or recent events in the financial markets from the ASG Capital Team.


The topic of today is about fat cats and starving dogs. Fat cats is a term to describe the rich and powerful. Starving dogs are aspiring to be fat cats, but are far from getting there.

Historically, low US interest rates over the last decade have been a subsidy to weak, highly levered, even zombie corporations, or in other words, starving dogs.

The Federal Reserve’s monetary policy rolled out in 2022 has put an end of to all of this. It will reveal its full effects in the coming months. Funding, or more importantly, refinancing costs compared to previous years are set to spike upward significantly.

As the US economy slows, the revenue stream from economic activity is likely to be depressed. Higher rates and lower cash flow together combine into a lethal cocktail, notably for already starving dogs.

To avoid being overexposed to a rising risk of default, fixed income and credit investors are best advised to stick to issuers with strong balance sheets, deep cash reserves and sound business models: the fat cats of this world.

High US interest rates could bring back the natural Darwinian survival of the fittest, with fat cats at worst, slimming off a bit while starving dogs literally starve out of existence.

This podcast is for information only. It should not be considered as investment advice. We would recommend seeking professional investment advice when allocating to investments to any issuer.


What are you looking for?

No investment decisions should be made solely on the basis of the information provided on the Website.

You understand and agree that this site should not be deemed as an offer to buy or sell any interest in ASG Capital, LLC or any other affiliated Funds.

Information on our website should not be acted upon without obtaining specific advice from a licensed professional regarding the readers own situation or concerns.

Any offer by ASG Capital, LLC or any other affiliated fund should only be accompanied or preceded by a current offering Memorandum.

Past performances are no guarantee of future results and no representation is made that results to these shown can be achieved.

Cookie Consent with Real Cookie Banner