For some time now, demand for houses has been artificially boosted by federal and state tax policies, rising governmental involvement in residential-debt financing, and persistently low interest rates orchestrated by the Federal Reserve.

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The fear that interest rates would spike, along with a sharp increase in the financing costs of their short-term debt caused a run for the exits, and many of these high-yield bets were hit hard.

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Infrastructure projects require lots of debt, but long-term financing in reais is extremely expensive.

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Dick May, managing director of American Working Capital, a private equity firm in Los Angeles and Chicago, said the family that founded American Greetings is taking advantage of low multiples in an out-of-favor industry, as well as inexpensive debt financing to bet on its future.

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More restrictive fiscal paths are being proposed in order to avoid rapidly rising government debt-to-GDP ratios and the financing challenges they may entail, including the possibility of default for nations without sovereign currencies.

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In addition to generating those exceptional internal returns, the firm has upped EPS in every year of the past decade and it has no long-term debt, showing the consistency and conservative financing my Buffett-based model cherishes.

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