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Author Topic: Global recession, supply issues and other COVID-19 consequences  (Read 58135 times)

be cause

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Re: Global recession
« Reply #150 on: March 16, 2020, 08:58:10 PM »
things unfolding as expected .. Dow down 3000 and falling . b.c.
2007 + 5 = 2012 + 4 = 2016 + 3 = 2019 + 2 = 2021 + 1 =  ' if only we could have seen it coming ' ...

Tom_Mazanec

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Re: Global recession
« Reply #151 on: March 16, 2020, 11:07:54 PM »
The Covid-19 Dominoes Fall: The World Is Insolvent
http://charleshughsmith.blogspot.com/2020/03/the-covid-19-dominoes-fall-world-is.html
Quote
Once the market value of global assets falls by $100 trillion, the world is insolvent.
Everyone expecting the financial markets to magically return to January 2020 levels once the pandemic dies down is delusional. All the dominoes of crashing market valuations, crashing incomes, crashing profits and soaring defaults will take down all the fantasy-based valuations of bubblicious assets: stocks, bonds, real estate, bat guano, you name it. (Actually, bat guano will be the keeper of all the asset classes listed.)
The global financial system has already lost $100 trillion in market value, and therefore it's already insolvent. The only question remaining is how insolvent?
Here's a hint: companies whose shares were recently worth $500 or $300 will be worth $10 or $20 when this is over. Bonds that were supposedly "safe" will lose 50% of their market value. Real estate will be lucky to retain 40% of its current value. And so on.
As net worth crashes below zero, debts remain. The loans must still be serviced or paid off, and if the borrowers default, then the losses must be absorbed by the lenders or taxpayers, if we get a repeat of 2008 and the insolvent taxpayers are forced to bail out the insolvent financial elites.
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Sigmetnow

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Re: Global recession
« Reply #152 on: March 17, 2020, 04:25:57 PM »
More than half of American jobs are at risk because of coronavirus
https://www.cnn.com/2020/03/16/economy/job-losses-coronavirus/index.html

——-
AMAZON
Quote
We are opening 100,000 new full and part-time positions across the U.S. in our fulfillment centers and delivery network to meet the surge in demand from people relying on Amazon’s service during this stressful time, particularly those most vulnerable to being out in public. We also know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis. We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back. In addition to the additional 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed. In the U.S., we will be adding an additional $2 USD per hour worked through April from our current rate of $15/hour or more, depending on the region, £2 per hour in the UK, and approximately €2 per hour in many EU countries. This commitment to increased pay through the end of April represents an investment of over $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.
https://blog.aboutamazon.com/company-news/amazons-actions-to-help-employees-communities-and-customers-affected-by-covid-19

—-
“Since COVID-19 likely did not start having broad economic impacts until about the end of February, we believe 1Q20 GDP growth will remain positive at about 1% but below original expectations of 2% or higher. If this turns out to be the case, it would mean two consecutive quarters of negative GDP growth [the standard definition of a recession] would not begin until the beginning of April and run through late September, providing some time for COVID-19 infection and fatality rates to possibly mitigate during the second half of the year. So for this reason alone, at least the technical definition of a recession is not a foregone conclusion. However, if first quarter GDP dips negative, we will assuredly have consecutive quarters of economic contraction in 1Q and 2Q. We realize much of this is definitional hair splitting; the important point being that we are looking at a severe decline in economic activity over the next three-to-six months, sending the economy into negative growth for that time frame.
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deep octopus

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Re: Global recession
« Reply #153 on: March 17, 2020, 06:55:38 PM »
Layoffs are beginning in earnest in the US.
https://www.washingtonpost.com/business/2020/03/17/stocks-markets-live-updates-coronavirus/#link-435GMI3MI5C7NL3OY7VYSJ35O4

“Marriott International, the world’s largest hotel brand, has begun furloughs affecting tens of thousands of employees as a global pandemic wears on large segments of the economy.“

 A coffee chain local to the Washington, DC area has laid off 90 percent of its employees:

“Also on Tuesday, Washington, D.C.-based Compass Coffee, laid off 180 of its 200 employees, according to local reporter Jason Shevrin. A company announcement shared online said that the company laid off ‘the vast majority of our baristas’ so they are eligible for unemployment benefits. Compass Coffee did not immediately respond to a request for comment.“

Alexander555

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Re: Global recession
« Reply #154 on: March 17, 2020, 08:15:06 PM »
Almost every country is going to face a massive budget deficit. And countries like the US already have a trillion deficit in good times.

dnem

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Re: Global recession
« Reply #155 on: March 18, 2020, 01:12:41 PM »
21,237.38 +1,048.86 (up 5.20%). Mar 17, 5:10 PM EDT

"U.S. equity futures hit "limit down" levels after falling 5% in early Asia trading, while index ETFs suggest 6.5% opening bell declines for the Dow ahead of housing starts data at 8:30 am Eastern time."

Man, that spinning top sure does wobble before it topples over.

El Cid

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Re: Global recession
« Reply #156 on: March 18, 2020, 01:20:23 PM »
Almost every country is going to face a massive budget deficit. And countries like the US already have a trillion deficit in good times.

Fiscal deficits don't matter. Central banks will finance it. MMT rulez

KiwiGriff

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Re: Global recession
« Reply #157 on: March 18, 2020, 05:07:51 PM »
Dow Jones Industrial Average
INDEXDJX: .DJI
19,981.78
 :o
Animals can be driven crazy by placing too many in too small a pen. Homo sapiens is the only animal that voluntarily does this to himself.
Notebooks of Lazarus Long.
Robert Heinlein.

Sigmetnow

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Re: Global recession
« Reply #158 on: March 18, 2020, 06:09:35 PM »
Just now (1:06 pm US Eastern Time).
People who say it cannot be done should not interrupt those who are doing it.

KiwiGriff

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Re: Global recession
« Reply #159 on: March 18, 2020, 06:30:05 PM »
Dow Jones Industrial Average
INDEXDJX: .DJI
19,306.02 −1,931.36 (9.09%)
18 Mar, 1:28 pm GMT-4 ·

Slow motion train Crash.
Animals can be driven crazy by placing too many in too small a pen. Homo sapiens is the only animal that voluntarily does this to himself.
Notebooks of Lazarus Long.
Robert Heinlein.

Sigmetnow

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Re: Global recession
« Reply #160 on: March 18, 2020, 06:50:06 PM »
Stocks Halt After 7% Drop in S&P 500; Oil and Bonds Drop in Sync
The Wall Street Journal
Quote
U.S. Markets
- Stocks Halt After 7% Drop in S&P 500; Oil and Bonds Drop in Sync
- Dow falls more than 1,600 points; oil hits lowest level in more than 18 years amid rising anxiety
- Stocks, bonds and commodities fell Wednesday in a simultaneous selloff that suggests investors are seeking to raise cash quickly to cope with the economic disruption sparked by the coronavirus pandemic.

The S&P 500 dropped 7% in midday trading, triggering a circuit breaker that halted trading in U.S. stocks for 15 minutes. The Dow Jones Industrial Average fell 1,661 points, or 7.8%, to 19577, and the Nasdaq Composite declined 6.3%.
All three indexes are down about 30% from their mid-February highs.
Oil, meanwhile, plunged 15% to its lowest level in more than 18 years.

Investors are even shunning assets that are normally considered the safest, including long-term government bonds and gold. That rarely happens when riskier assets like stocks are also falling.

Yields on government bonds in most major economies including the U.S., Japan and across Europe rose sharply Wednesday, while investors sheltered in the shortest-term government debt and cash.


The yield on the U.S. 10-year Treasury note rose to 1.069% from 0.994% Tuesday as bond prices tumbled. The yield on the one-month U.S. bill briefly turned negative for the first time since 2015. Gold fell about 1%.

The selling of government debt shows the market mentality has completely flipped, said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“Now that they’ve gotten around to U.S. Treasurys, that tells you that legitimately nothing is safe,” he said. “There’s no place to hide other than cash.”


The ramifications of the pandemic are spiraling quickly. The number of infections globally crossed 200,000, more than doubling in just two weeks. Governments are asking citizens abroad to come home and those already at home to stay there.

“It’s happening so fast, it’s almost too much to grasp at this point,” said Frank Cappelleri, the executive director at Instinet. “It’s at the point where if you check the futures at nighttime and you’re not limit down, it’s a relief.”

That has thrown the market’s “risk on” attitude into sharp reverse. A month ago, stocks were hitting new records daily. A week ago, investors were debating whether the pandemic would cause a recession. Now, the question is whether the economy will be thrown into its worst recession in decades.

“When even silver and gold are getting crushed, that’s a panicked drawing of liquidity,” said Rob Arnott, founder of California-based investment firm Research Affiliates. “In the U.S., you can’t find toilet paper anywhere: This is the capital markets equivalent of that.”

The pan-continental Stoxx Europe 600 index fell 4.2%, hitting its lowest level since December 2012. Most major Asian markets closed lower, with Hong Kong’s Hang Seng Index falling 4.2%.
...
https://www.wsj.com/articles/u-s-futures-fall-asian-markets-mixed-11584498324
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Tom_Mazanec

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Re: Global recession
« Reply #161 on: March 18, 2020, 09:08:13 PM »
Dow down 1338 or 6.3%
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TerryM

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Re: Global recession
« Reply #162 on: March 18, 2020, 09:42:58 PM »
USD / CAD 1.45
Seems like the rush to US dollars is leaving everything else swamped in its wake.
Terry

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Re: Global recession
« Reply #163 on: March 18, 2020, 09:46:45 PM »
USD / CAD 1.45
Seems like the rush to US dollars is leaving everything else swamped in its wake.
Terry

Especially petrocountries! (the rouble and the CAD are on the same road to hell :)

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Re: Global recession
« Reply #164 on: March 18, 2020, 10:01:52 PM »
The Dow has now dropped below where it was on the day of Trump’s inauguration in 2017.

Therefore, all of the stock market gains that Trump has repeatedly boasted about have now been wiped out.



https://mobile.twitter.com/TheStalwart/status/1240315639853703170

------------------------------------

Trading was temporarily halted at the New York Stock Exchange, with the Dow currently down more than 1,800 points.

This marks the fourth time in two weeks that trading has been halted because of steep losses linked to investors’ fears about the coronavirus crisis.

----------------------------------

The Detroit Three -- Ford, GM and Fiat Chrysler -- have agreed to temporarily close all US plants to protect workers against coronavirus.

---------------------------------

JPMorgan is now predicting the second quarter of this year could see the US economy slump by as much as 14% because of the coronavirus crisis.

Unemployment rate goes to 6.25% midyear, 5.25% in Dec.

https://mobile.twitter.com/KellyCNBC/status/1240340956081262593

--------------------------------
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Aporia_filia

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Re: Global recession
« Reply #165 on: March 18, 2020, 10:38:29 PM »
Naomi klein view.
Coronavirus capitalism - and how to beat it

https://theintercept.com/2020/03/16/coronavirus-capitalism/

TerryM

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Re: Global recession
« Reply #166 on: March 18, 2020, 11:43:37 PM »
^^
Thanks!


It's nice to hear encouraging words from one of Canada's brightest young philosophers.
Terry

be cause

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Re: Global recession
« Reply #167 on: March 19, 2020, 08:13:05 AM »
Those with pounds in their pockets are starting to see how well a 'little britain' does in a challenging world . As I wrote way back in the early daze of Brexit we see our currency collapse . The obvious outcome , but not to the idiots now in charge of the country .
  Incompetence rules . Sadly everyone is going to pay the price , not just those that voted for them . b.c.
2007 + 5 = 2012 + 4 = 2016 + 3 = 2019 + 2 = 2021 + 1 =  ' if only we could have seen it coming ' ...

Sigmetnow

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Re: Global recession
« Reply #168 on: March 19, 2020, 03:08:04 PM »
China has turned a corner. 
Quote
Jonathan Ferro (@FerroTV) 3/17/20, 6:28 PM
China getting back to work
FedEx says...
-Demand rebounded more than expected
-65-70% of small business operating again
-90-95% of large manufacturers operating
https://twitter.com/ferrotv/status/1240042395598807040


From Feb. 28, 2020
China gets back to work — sort of — as number of new COVID-19 cases wanes
Quote
Over 43% of small and midsize enterprises in China’s manufacturing sector had resumed production as of Wednesday, Zhang Kejian, deputy minister of industry and information technology, told state media. This is crucial for these smaller firms, as many said in a recent survey that they could survive for only one to two months on their savings.

Toyota Motor Corp. TM, +1.69% has restarted production to some degree at all its China plants, the company said Tuesday. And that’s good, because the Chinese people are driving again, according to measurements of traffic congestion and the Baidu Migration Index, which showed that more than 60% of people have returned to their workplace areas in China’s 100 biggest cities. The government has even chartered a number of planes to carry returning workers, the state outlet CCTV reported. …
https://www.marketwatch.com/story/china-gets-back-to-work-sort-of-as-number-of-new-covid-19-cases-wanes-2020-02-28
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Sigmetnow

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Re: Global recession
« Reply #169 on: March 19, 2020, 03:14:17 PM »
Why the COVID-19 Financial Crisis Is Like No Other
Quote
Economies across the world are already experiencing a significant contraction in economic activity that will likely last through the first half of the year. JP Morgan economists predicted that the U.S. economy would shrink by 2% in the first quarter and as much as 10% in the second quarter, while the economy of the 19 nations using the euro would contract by 1.7% in the first quarter and 3.3% in the second. Economic activity will start to expand again in the second half of the year, they said—even sooner in China, which they say will see growth in the second quarter of 2020 as life there starts to normalize. ...
https://time.com/5805526/coronavirus-economy-layoffs/
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Sigmetnow

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Re: Global recession
« Reply #170 on: March 19, 2020, 09:42:34 PM »
How long will things be bad?  Nobody knows.

Recovery could be just months away!
The stock market may bottom long before the coronavirus epidemic peaks, analysts say
If government action can stop another financial crisis, a sharp recovery could ensue
Quote
Since mid-February, the Dow Jones Industrial Average DJIA, +1.01%, the S&P 500 index SPX, +0.95% and the Nasdaq Composite index COMP, +2.99% have all declined nearly 30%, marking the fastest onset of a bear market in history. …
https://www.marketwatch.com/story/the-stock-market-may-bottom-long-before-the-coronavirus-epidemic-peaks-analysts-say-2020-03-19

—-
Recovery could take five years!

Stocks will face ‘long road’ back to the highs when bear market bottoms, says analyst who called 2018 swoon
Could take five years for S&P 500 to move back above 3,000: Stifel’s Bannister
Quote
Don’t bank on a V-shaped rebound once the stock market’s coronavirus-driven plunge finally hits bottom, according to a Wall Street analyst who called the market’s late-2018 swoon.
“Our S&P 500 model points to a long road back to a price over 3,000 for the S&P 500, probably due to major stress on growth versus value (amid populist reflationary policy),” wrote Barry Bannister, head of institutional equity strategy at Stifel, in a Tuesday note. ...
https://www.marketwatch.com/story/stocks-will-face-long-road-back-to-the-highs-when-bear-market-bottoms-says-analyst-who-called-2018-swoon-2020-03-17


=======
Why are bonds failing to act like a safe-haven as stocks sell off ?
Quote
Some economists have suggested bond traders could be waking up to the fact that the U.S. government’s fiscal deficits will start to finally matter, and that the broader investment community will struggle to take down the U.S.’s yawning debts.

According to that logic, the wave of debt supply from the fiscal stimulus packages discussed by U.S. policymakers this week could overwhelm investors and push values for government bonds lower, and yields higher.

“Fed officials have often worried about increased government spending on the retiring, baby boom workers, and now it looks like the debt deluge that sends bond yields soaring could come years before it was expected,” said Chris Rupkey, chief financial economist at MUFG.

But market participants said the real reason driving rates higher was more mundane and frightening — investors needed to raise cash to cover their losses. …
https://www.marketwatch.com/story/why-are-bonds-failing-to-act-like-a-safe-haven-as-stocks-sell-off-2020-03-18
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Sigmetnow

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Re: Global recession
« Reply #171 on: March 20, 2020, 02:36:21 PM »
The upcoming job losses will be unlike anything the US has ever seen [in 40 years]
Quote
When the damage the coronavirus inflicts on the U.S. jobs market becomes clearer, it could be unlike anything the country has ever seen.

Judging by numerous forecasts from economists, the avalanche of furloughs will easily break the record for most in a single month.

Upcoming weekly jobless claims will shatter the standards set even during the worst points of the financial crisis and the early-1980s recession, with Bank of America forecasting a total of 3 million when the number is released Thursday. Those figures are expected to be so bad, in fact, that the Trump administration, according to several media reports, has asked state officials to delay releasing precise counts.

While the headline unemployment rate is highly unlikely to approach the 24.9% during the Great Depression, it very well could be the highest in almost 40 years, something unthinkable for a jobs market that had been on fire as recently as February.

Job losses will be counted not in the thousands or even hundreds of thousands, but rather in the millions. Although it's uncertain whether the total count from this recession ends up breaking previous records, it's a good bet that April's number will outpace by a large margin any single month in U.S. history for a drop in nonfarm payrolls.

5 million in April alone?
The worst month for job losses during the financial crisis was 800,00 in March 2009.
Some forecasts see April quintupling that or worse. Forecasts for that month range from 500,000 to 5 million. ...
https://www.cnbc.com/2020/03/20/the-upcoming-job-losses-will-be-unlike-anything-the-us-has-ever-seen.html
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Tom_Mazanec

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Re: Global recession
« Reply #172 on: March 20, 2020, 02:44:01 PM »
Coronavirus could spark another Great Depression, former Trump adviser warns
https://www.cnn.com/2020/03/19/business/great-depression-coronavirus-kevin-hassett/index.html
Quote
"We're going to have to either have a Great Depression, or figure out a way to send people back to work even though that's risky," Hassett told CNN's Poppy Harlow. "Because at some point, we can't not have an economy, right?"
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

Tom_Mazanec

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Re: Global recession
« Reply #173 on: March 20, 2020, 02:49:32 PM »
“This feels much worse than 2008”: Obama’s chief economist on coronavirus’s economic threat
https://www.vox.com/2020/3/13/21177850/coronavirus-covid-19-recession-stock-market-economy-jobs-stimulus
Quote
I’ve spoken with Furman often over the years, and to put it bluntly, I’ve never heard him as alarmed as on Thursday. He believes the coronavirus could do more damage to the economy than the financial crisis did, and that policymakers aren’t even close to designing a large enough response. In addition, the virus is moving much faster than the financial crisis did, and the government officials who will need to respond to it are in danger of being infected by it.

A transcript of our conversation, lightly edited for length and clarity, follows.
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

kassy

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Re: Global recession
« Reply #174 on: March 20, 2020, 03:02:23 PM »
Or instead of BS Wall Street shit you can hire people to:

Fix US roads (smooth rides equals less fuel use, less potholes equals less damage thus less replacement parts).

Build or maintain windmills and solar plants.

Build local grids.

Build coastal defences that help (so check effects on whole coast etc)

Improve housing (Isolation etc)

Remove all the old ineffecient ACs that eat energy and are almost always ran on a too high level because well that is the Murican way...or something like that. So build new efficient ones and install them everywhere. Just putting a max limit on thier output can save tons of energy.

So there are ample opportunities after decades of neglect.
Even better the USA could pay for it by just using the money squandered at the Pentagon. (lets start at a third of the budget).

Þetta minnismerki er til vitnis um að við vitum hvað er að gerast og hvað þarf að gera. Aðeins þú veist hvort við gerðum eitthvað.

blumenkraft

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Re: Global recession
« Reply #175 on: March 20, 2020, 03:06:09 PM »
These would be the right things to do right now.

Instead the orange fascist and conservatives all over the world are taking that money to bail out FF companies and airlines.

Stupid stupid stupid stupid stupid stupid stupid stupid stupid stupid stupid stupid!

Sigmetnow

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Re: Global recession
« Reply #176 on: March 20, 2020, 05:09:11 PM »
”The market for munis this week has all but collapsed, with few willing to step in and buy the government debt in the uncertainty of the current climate.”
The Federal Reserve is expanding its asset purchases to include municipal bonds
Quote
The program will work through the Money Market Mutual Fund Liquidity Facility announced earlier this week and offers an expansion of what had been a financial crisis-era program authorizing purchases of other assets. Expanding into munis is something that did not happen during the crisis. ...
https://www.cnbc.com/2020/03/20/the-federal-reserve-is-expanding-its-asset-purchases-to-include-municipal-bonds.html
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vox_mundi

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Re: Global recession
« Reply #177 on: March 20, 2020, 06:47:09 PM »
Goldman Sees Unprecedented Stop In Economic Activity, With 2nd Quarter GDP Contracting 24%
https://www.cnbc.com/2020/03/20/goldman-sees-an-unprecedented-stop-of-economic-activity-with-2nd-quarter-gdp-contracting-by-24percent.html

Goldman Sachs economists forecast an unprecedented 24% decline in second-quarter gross domestic product, following a 6% decline in the first quarter, based on the economy’s sudden and historic shutdown as the country responds to the coronavirus pandemic.

The economists then expect a bounce-back of 12% in the third quarter and 10% in the fourth quarter, but unemployment will surge to 9%. They also expect GDP to contract by 3.8% for the full year on an annual average basis, and 3.1% on a fourth-quarter over fourth-quarter basis.
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Sigmetnow

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Re: Global recession
« Reply #178 on: March 20, 2020, 06:51:04 PM »
Dutch government to borrow extra 45-65 billion euros in next 3 months
Quote
The Dutch government expects its borrowing needs in the coming three months will be 45-65 billion euros ($48-$70 billion) more than expected to fund the cost of its response to the coronavirus outbreak, the country’s finance minister said in a letter to parliament.

The Dutch national debt was 395 billion euros as of the end of the third quarter, according to data from the country’s statistics office, approximately 49% of gross domestic product (GDP).*
https://www.reuters.com/article/health-coronavirus-netherlands-borrowing/update-1-dutch-government-to-borrow-extra-45-65-billion-euros-in-next-3-months-idUSL8N2BD72H
*Fun fact:  US federal debt was 106.9% of GDP in 2019.


==== U.S.:
National Restaurant Association forecasts $225 billion loss, up to 7 million jobs lost due to coronavirus
https://www.marketwatch.com/story/national-restaurant-association-forecasts-225-billion-loss-up-to-7-million-jobs-lost-due-to-coronavirus-2020-03-20

———
Op-Ed: As coronavirus cripples the US economy, lawmakers must fix another looming problem
There is another group of Americans who find themselves in increasingly perilous circumstances and in need of relief – the millions of retirees and workers whose multiemployer pension plans are running out of money.
Quote
The Central States Pension Fund, one of the largest multiemployer pension plans, is expected to go insolvent in just five years. Not only would this directly harm hundreds of thousands of workers and retirees, with compounding effects on the children, spouses, and parents they support, it would also result in a crippling domino effect on the U.S. economy. Economists estimate the failure of Central States will result in more than a $5 billion GDP shortfall, a loss of more than $1 billion in federal tax revenue, and 55,000 fewer jobs.

 During the last fiscal year alone, six multiemployer plans were terminated, and eight others requested financial assistance from the Pension Benefit Guaranty Corporation (PBGC), the federal backstop for plans that can no longer cover promised benefits. For a time, the PBGC was able to step in and help pay retirees' benefits when plans like these were in trouble.

But now, the PBGC is also projected to become insolvent in five years, making their "guaranty" not much better than a band-aid solution. When the PBGC runs out of money, retirees' benefits will be cut by an average of more than 94 percent. …
https://www.cnbc.com/2020/03/20/op-ed-lawmakers-must-fix-another-looming-economic-problem.html
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wili

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Re: Global recession
« Reply #179 on: March 20, 2020, 08:31:34 PM »
vox quoted from cnbc: "...economists then expect a bounce-back of 12% in the third quarter and 10% in the fourth quarter..."

Based on what, one wonders...
"A force de chercher de bonnes raisons, on en trouve; on les dit; et après on y tient, non pas tant parce qu'elles sont bonnes que pour ne pas se démentir." Choderlos de Laclos "You struggle to come up with some valid reasons, then cling to them, not because they're good, but just to not back down."

dnem

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Re: Global recession
« Reply #180 on: March 20, 2020, 08:34:43 PM »
Based on what, one wonders...

Wishful thinking?

vox_mundi

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Re: Global recession
« Reply #181 on: March 20, 2020, 09:04:03 PM »


« Last Edit: March 21, 2020, 02:39:28 AM by vox_mundi »
“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Tom_Mazanec

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Re: Global recession
« Reply #182 on: March 20, 2020, 09:06:29 PM »
Dow down 913 or 4.55%.
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Sigmetnow

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Re: Global recession
« Reply #183 on: March 21, 2020, 01:53:35 AM »
”Someone in Granville called this ‘the Great Hiatus’. I like that. Let’s go with it.”

https://twitter.com/eruptionsblog/status/1241082743582273536
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nanning

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Re: Global recession
« Reply #184 on: March 21, 2020, 05:08:34 AM »
Your cat-bounce cartoon made me laugh out loud vox. Brilliant.
Thanks again for all your creative cartoon selections and unrelentless high quality COVID-19 posting.
"It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly" - Bertrand Russell
"It is preoccupation with what other people from your groups think of you, that prevents you from living freely and nobly" - Nanning
Why do you keep accumulating stuff?

TerryM

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Re: Global recession
« Reply #185 on: March 21, 2020, 06:39:59 AM »
The Global Recession is coming here, but faced with death and life altering disease it's small potatoes until we've broken the back of CV19.


Slowing the onset of CV19 is the only chance we have to come through this without being reduced to animals fighting for our next meal, our last breath. The kids dancing on the beach may return home and inherit their family wealth years earlier than expected. - if they survive until the paperwork has gone through.


Money spent on the education of kids who care so little for their own, or the lives of their families would have been better spent on blow and hookers. Change your will before their "vacation" is over.


Terry

KiwiGriff

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Re: Global recession
« Reply #186 on: March 21, 2020, 07:20:20 AM »
Out on  a limb.
Griff expect the Dow and other metrics to settle on 50% of their highs .
We still have a while to fall yet.
Why the fuck don't they get it ?
This pandemic  a global catastrophe that will play out over the coming years not months.

Animals can be driven crazy by placing too many in too small a pen. Homo sapiens is the only animal that voluntarily does this to himself.
Notebooks of Lazarus Long.
Robert Heinlein.

Tom_Mazanec

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Re: Global recession
« Reply #187 on: March 21, 2020, 02:06:01 PM »
You know, I just realize that, for the rest of the Century we will probably refer to the Teens as “The Good Old Days”.
There was tv series where the universe was “split” by a physics experiment around 1990, and the two histories diverged from there...watched it last year on Amazon Prime. One of the historic differences of the other world was that they had a plague like this one. A plot point was that they think we might have introduced the virus to them, like the conspiracy theories in America and China of the Coronavirus. They depicted the cultural changes resulting from this nicely. Drat, I forget the title...anyone else remember it?
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El Cid

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Re: Global recession
« Reply #188 on: March 21, 2020, 03:36:22 PM »

This pandemic  a global catastrophe that will play out over the coming years not months.
This is going to cause a huge recession, many will go bankrupt, big numbers of unemployed, no question about that. But will definitely not take years. You can stop the world for 2 months but not 9. If we can't get anywhere by summer, then the economic pain will be too much to bear and they will just let it rampage thru the population, aka herd immunity. Or we will get a vaccine by autumn. Either way, 2021 is going to see an economic rebound. Besides there is going to be so much fiscal stimulus that noone has ever seen since WW2

Alexander555

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Re: Global recession
« Reply #189 on: March 21, 2020, 03:46:10 PM »
It think much will depend on the fact , will it become endemic or not. And will it mutate. We know it already mutated. If it becomes endemic, than we are not going to see cruise ships full with old people anymore. For that the risk for them will become big. If it becomes endemic it can change the world as we know it. Than very normal things will become a big risk for many people. So they will stay home more.

Tom_Mazanec

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Re: Global recession
« Reply #190 on: March 21, 2020, 04:06:15 PM »
El Cid
The amount of stimulus needed to beat what is happening, with the kind of fiscal shenanigans that we have enjoyed the past decade, could cause hyperinflation.
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TerryM

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Re: Global recession
« Reply #191 on: March 21, 2020, 04:57:51 PM »
There has been a rush to the safety of the American Dollar. This weekend my American Bucks are worth 1.43 Canadian Loonies.


A windfall for those of us living in Canada on American currency. 8)
Terry

Sigmetnow

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Re: Global recession
« Reply #192 on: March 21, 2020, 06:37:01 PM »
March 14, 2020
After the most volatile week on Wall Street since the 2008 financial crisis as the coronavirus epidemic began to shut down swaths of the U.S. economy, the health of the U.S. stock and bond markets may now depend on how corporate debt fares in the coming months.
Fed should request Congress to allow the Fed to buy corporate bonds like the ECB did
Wall Street fears ‘flashbacks to 2008’ with forced selling in $9 trillion U.S. corporate bond market
https://www.marketwatch.com/story/wall-street-fear-flashbacks-to-2008-of-forced-selling-in-9-trillion-us-corporate-bond-market-2020-03-14

March 18
The U.S. government and American families have been swimming in debt — and will soon be drowning
Quote
• Let us imagine a household that is in debt up to its eyeballs and every month spending more than its income by a large amount. Then a disaster hits. Income goes down substantially, and expenses go up substantially. What will the result be — bankruptcy? The U.S. is a resilient, strong and rich nation. However, the example of the hypothetical household applies. The eventual solution may be demonetization of the debt.

• Yes, demonetization of the debt is ahead — the same debt that investors are rushing to buy for its perceived safety.
http://www.marketwatch.com/story/the-us-government-and-american-families-have-been-swimming-in-debt-and-will-soon-be-drowning-2020-03-18

March 20
Investors pull record $108 billion out of bond funds this week
Quote
The largest outflows in bond funds on record this week likely reflect how investors are raising cash in fear that market turmoil will hurt returns further.

Funds and exchange-traded funds invested in bonds saw $108 billion of outflows this week ending on Thursday, nearly four times of the previous record. On the other hand, investors flocking to cash poured more than $90 billion into money market funds.

“Seeking to liquidate assets without locking in big losses, investors cashed out of bond funds on an epic scale,” said Cameron Brandt, director of research at EPFR Global, in a Friday note.

The worry is that once fund managers get rid of their most liquid holdings to meet redemptions, some may be forced to eventually sell their most illiquid holdings at a hefty transaction cost.

Money managers have been selling into fixed-income markets that have frozen up as primary dealers pulled back from their role as a facilitator of trading. These select group of dealers, who enjoy the privilege of buying bonds directly from the U.S. Treasury Department, have been reluctant to buy bonds and keep them in inventory, before selling them again, say market participants.
https://www.marketwatch.com/story/investors-pull-record-108-billion-out-of-bond-funds-this-week-2020-03-20

March 20
Clearing firm Ronin Capital unable to meet capital requirements at CME: Sources
Quote
In yet another a sign that the turmoil in financial markets is putting extreme stress on some firms, one of the CME Group's direct clearing firms was unable to meet its capital requirements, according to sources.

The move forced the exchange to step in and invoke its emergency protocols to auction off the portfolios. Ronin Capital, based in Chicago, was confirmed to be the firm in question, according to sources. …
https://www.cnbc.com/2020/03/20/clearing-firm-ronin-capital-unable-to-meet-capital-requirements-at-cme-sources.html
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Sigmetnow

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Re: Global recession
« Reply #193 on: March 21, 2020, 06:39:49 PM »
Germany eyes 156 bln euros of new borrowing, 200 bln euros in debt authorisation
Quote
Germany is readying stimulus measures requiring about 156 billion euros ($166.83 billion) in net new borrowing and additional debt authorisation of up to 200 billion euros to fight the economic impact of the coronavirus outbreak, according to a draft law and senior officials.

The package will include a supplementary government budget of 156 billion euros, 100 billion euros for an economic stability fund that can take direct equity stakes in companies, and 100 billion euros in credit to public-sector development bank KfW for loans to struggling businesses, the sources said.
The combined sum of possibly 356 billion euros in new debt would represent roughly 10% of Germany’s gross domestic output.
https://www.reuters.com/article/germany-debt/update-1-germany-eyes-156-bln-euros-of-new-borrowing-200-bln-euros-in-debt-authorisation-idUSL8N2BE0EV


EU approves 300 bln euro French state aid to fight coronavirus
Quote
BRUSSELS, March 21 (Reuters) - The European Commission said on Saturday it had approved three French state aid schemes to support the French economy amid the coronavirus epidemic that would mobilise 300 billion euros of liquidity support for affected companies.

Two of the schemes enable the French public investment bank Bpifrance to provide state guarantees on commercial loans and credit lines for firms with up to 5,000 employees.

The third scheme provides state guarantees to banks on portfolios of new loans for all types of companies. This is direct aid to the companies that will enable banks to quickly provide liquidity to any company that needs it. ...
https://www.reuters.com/article/health-coronavirus-eu-france/eu-approves-300-bln-euro-french-state-aid-to-fight-coronavirus-idUSB5N28S00D
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edmountain

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Re: Global recession
« Reply #194 on: March 21, 2020, 07:10:07 PM »
The Global Recession is coming here, but faced with death and life altering disease it's small potatoes until we've broken the back of CV19.


Slowing the onset of CV19 is the only chance we have to come through this without being reduced to animals fighting for our next meal, our last breath. The kids dancing on the beach may return home and inherit their family wealth years earlier than expected. - if they survive until the paperwork has gone through.

...
I'm not sure I agree. COVID-19 is a threat but not one that I would characterize as existential.

As a clinician I must say that as bad as COVID-19 is, the existential threat posed by a second great depression frightens me even more. A pandemic comes but it also goes. The cycle of poverty and its associated diseases--malnutrition, treatable childhood illnesses, tuberculosis, HIV, depression, and many more--is a larger multi-generational threat than a pandemic. Worse, a weakened society burdened by poverty will be even more susceptible to future pandemics.

It is  therefore absolutely necessary that our response be based on consideration of metrics beyond just a simple count of the raw number of deaths directly from COVID-19.


Source: https://idpjournal.biomedcentral.com/articles/10.1186/2049-9957-1-3

Tom_Mazanec

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Re: Global recession
« Reply #195 on: March 21, 2020, 07:34:32 PM »

https://mises.org/wire/global-economy-wont-bounce-back-soon
Quote
Calls for large fiscal packages to offset the pandemic may be useless. Allen-Reynolds at Capital Economics warned that “even if governments agreed on a larger tax and spending package, the economic impact would be much smaller than it would have been in the past, particularly if the fiscal stimulus was concentrated in Germany,” because output gaps are almost inexistent. This is not a demand problem; it is a supply shock, and you don’t address supply shocks with bricks, mortar, and deficit spending.
The shutdown of developed economies is now granted and will likely take us more than a couple of weeks afield. The shutdown of emerging economies is likely to start in May and to impact 2020 and 2021 estimates. Every analysis we have seen so far only factors in a 2020 recession, not a crisis, and even less a large 2021 hit to the economy, but the financial implications in an already overleveraged world add a string of credit events to an economic shutdown.
The latest wave of downgrades already assumes a large-scale stimulus, rate cuts, and quantitative easing. The diminishing returns of monetary easing were already evident in 2018 and especially in 2019, with global manufacturing purchasing managers' indexes (PMIs) in contraction and growth estimates coming down significantly throughout the year. Average downward growth revisions by country averaged 20 percent between January and December, in the middle of a massive coordinated central bank injection operation that injected up to $170 billion a month into the economy (considering the People's Bank of China (PBOC), Bank of Japan (BOJ), European Central Bank (ECB), and Fed) and saw widespread rate cuts.
The economic implications of a pandemic will not be solved with massive spending increases. Governments will implement large demand-side policies that are the wrong answer to a shutdown of the economy. Most businesses will suffer from the collapse in sales and subsequent working capital build, and none of that will be solved with deficit spending. You cannot mitigate a supply shock with demand policies, which increase debt and overcapacity in the already indebted and bloated sectors and do not help the sectors that are suffering an abrupt collapse in activity.
A forced temporary shutdown must also include a shutdown of the tax collection system. Governments already finance themselves at negative rates. They must eliminate (not defer) tax payments for companies in the period of crisis to avoid a massive unemployment increase and a domino of bankruptcies and facilitate working capital lines at zero rates to allow businesses and self-employed workers to navigate a shutdown. Governments that make the mistake of maintaining the current tax structure or who just prolong the payment period for six months will see the massive negative consequences of a shutdown in the next nine months.
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Tom_Mazanec

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Re: Global recession
« Reply #196 on: March 21, 2020, 07:45:25 PM »
This Is Not a Recession. It’s an Ice Age.
https://www.theatlantic.com/ideas/archive/2020/03/quantifying-coming-recession/608443/
Quote
What is happening is a shock to the American economy more sudden and severe than anyone alive has ever experienced. The unemployment rate climbed to its apex of 9.9 percent 23 months after the formal start of the Great Recession. Just a few weeks into the domestic coronavirus pandemic, and just days into the imposition of emergency measures to arrest it, nearly 20 percent of workers report that they have lost hours or lost their job. One payroll and scheduling processor suggests that 22 percent of work hours have evaporated for hourly employees, with three in 10 people who would normally show up for work not going as of Tuesday. Absent a strong governmental response, the unemployment rate seems certain to reach heights not seen since the Great Depression or even the miserable late 1800s. A 20 percent rate is not impossible.
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Bruce Steele

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Re: Global recession
« Reply #197 on: March 21, 2020, 07:48:38 PM »
Maybe it is insensitive to point out that the 2008 economic fiasco was the only downturn in CO2 emissions we have collectively contributed to. Maybe the people flying to Italy to go skiing isn’t an
expense / luxury that we should rationalize because it “helps the economy” ? There are lots of other examples of wanton waste we call our economy and yes it keeps the wheels turning and we can afford healthcare, a big military, and massive government infrastructure because living large, and betting the market  are all we got to maintain BAU. Betting that the world actually fixes it’s CO2 issues while maintaining our extravagant lifestyles is fantasy thinking.
 I know Ed mountain means well and everyone else in society who performs anything as critical as healthcare deserves lots and lots of respect right now . I also think the third world  already suffers under the problems edmountain is trying to save the rest of us from. The poor weren’t flying viruses around the world to spread them, they largely haven’t been responsible  for the CO2 habit we promote and their lives will not change as much as ours in the aftermath of this pandemic. So maybe being poor is better in some ways ?  That is somethings may be good for you even if they don’t feel that way.

TerryM

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Re: Global recession
« Reply #198 on: March 22, 2020, 12:24:17 AM »
Rich dead people don't provide much support for a robust economy.



I've lived with those trapped in intergenerational poverty - the point is that they lived.
None of us have lived through a pandemic like CV19 - they're already triaging people in Northern Italy. NYC is closing on Italy. No one has any idea what this will look like if it goes unchecked.


Hopefully no one ever will know.


Stay Isolated, Stay Healthy, Stay in Touch!
Terry

nanning

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Re: Global recession
« Reply #199 on: March 22, 2020, 04:57:34 AM »
Excellent reasoning there Bruce.
"It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly" - Bertrand Russell
"It is preoccupation with what other people from your groups think of you, that prevents you from living freely and nobly" - Nanning
Why do you keep accumulating stuff?