Nov 1 18 SIT
EC y POL
ND denounce Global-neoliberal debacle y
propone State-Social + Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal globalization is over.
Financiers know it, they documented with graphics
"We must recognize that the climate crisis and the resurgence of the far
right are two of the most acute symptoms of our failure to abolish
capitalism."
"Fascism is
ascendant," the Ivy League professor continues.
"The world is on
fire. This is no time to be patient. If we don’t abolish capitalism, capitalism
will abolish us."
Get his Book
Info here:
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MUST READ!
"Innovations
like bank loan ETFs have moved credit risk into the hands of retail investors.
That’s something we didn’t have to worry about in the last major crisis in
corporate credit, in 2001/02.
..We’re in
uncharted territory."
As investors have continued to shy away
from both conventional investment grade and high yield debt, interest in leveraged loans has exploded in recent years -
a result of their floating rate interest which keeps up with rising Fed Fund
rates within a largely unregulated industry in which non-bank entities (such as
hedge funds) are among the main lenders - and as a
result the size of the leveraged loan market recently crossed a historic
milestone, surpassing the size of the entire US junk bond market.
See Chart:
https://www.zerohedge.com/sites/default/files/inline-images/leverage%20loans%20vs%20junk%20bonds.jpg
And investors have noticed.
According to IHS Markit, the short interest in the Invesco Senior Loan
ETF, the largest vehicle backed by leveraged loan debt,
has hit a record high with borrowed shares surging to 32 million.
See Chart:
And, as Bloomberg
notes, the rush to bet against the fund, ticker BKLN, has been so
aggressive that 88% of shares available to lend from institutions have already
been claimed, according to IHS Markit director Samuel Pierson. "While the ETF is still easy to borrow, there will be
some friction soon if demand continues to rise" from short-sellers,
said Pierson.
Others are concerned on September memo to
clients: Oaktree's co-chairman Howard Marks observed
that "Growth has been in levered loans, not high-yield bonds,” adding
that "the risk level has risen in loans while
remaining stable in high yield bonds." Some other big picture
observations from his memo:
- Total leveraged debt outstanding (high yield bonds and leveraged loans) is now $2.5 trillion, exactly double the amount in 2007. Leveraged loans have risen from $500 billion in 2008 to almost $1.1 trillion today.
- Most of this growth has been in levered loans, not high yield bonds. Whereas the amount of high yield bonds outstanding is roughly unchanged from the end of 2013, leveraged loans are up $400 billion. In the process, we think the risk level has risen in loans while remaining stable in high yield bonds. These trends in loans are due in large part to strong demand from new Collateralized Loan Obligations and other investors seeking floating-rate returns.
- “Some $104.6 billion of new [leveraged] loans were made in May, according to Moody’s Investors Service, topping a previous record of $91.4 billion set in January 2017, and the pre-crisis high of $81.8 billion in November 2007.”
- The average debt multiple of EBITDA on large corporate loans is just above the previous high set in 2007; the average multiple on large LBO loans is just below the 2007 high; and the average multiple on middle market loans is at a clear all-time high.
- $375 billion of covenant-lite loans were issued in 2017 (75% of total leveraged loan issuance), up from $97 billion (and 29% of total issuance) in 2007.
Guggenheim's Chief Investment Officer,
Scott Minerd, is just as gloomy: when
asked during a recent interview with Goldman Sachs what aspect of capital markets he is most worried about, and
whether he is worried by the growth of non-bank lending, he had a simple
answer: leveraged loans.
Fifteen
years ago, around 80% of all syndicated loans remained on bank balance sheets
through a “pro-rata” tranche that was a revolving credit line or an amortizing
term loan; now, 70-80%
of syndicated bank loans are outside of the banking system, meaning that the
pro-rata tranche is much smaller in comparison to the institutional loan tranche
that is distributed among non-bank lenders. We’ve
also seen estimates that the private debt market has grown to around $400bn to
$700bn in size—larger than the size of the bank loan market in 2007. That has
made it harder to trace credit risk and maintain credit standards.
Meanwhile, innovations like bank loan ETFs have moved credit risk into the hands of
retail investors. That’s something we didn’t have to worry about in the last
major crisis in corporate credit, in 2001/02.
His conclusion:
"We’re in uncharted territory."
He is right, of course, and as more
investors realize that they are piling on the shorts in
what will be ground zero of the next credit crisis.
….
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US DOMESTIC POLITICS
Seudo democ duopolical Sys in US is
obsolete; it’s full of frauds & corruption. Urge cambio
[[ We are close to genocide. IF happens,
REPs will lose the House & Senate in Midterm-Elect.. Impeachment will
come.. If try to do what Clinton did: (WW3 this time) it won’t work.. Trump may
be bury in his bunker.. and not because of R-C, but by his enemies in “the
deep-state” ]]
Read this:
"Anybody throwing rocks... we will consider that a firearm"
[[ If Trump do it.. he better resign to power. Do not involve the whole
Nation in it ]]
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RELATED:
"I’m going to do to you what you did to us..."
[[ The only way to avoid more violence in the US is
Trump’s resignation .. better if this come with the resignation of the whole Cabinet,
including the VP. Let the Supreme Court decide 2 things: a- what will be the
temporary cabinet and b- make a Team in charge of proposing a New Political
System (election now are contaminated by Fraud-corruption: the buying of votes
by Big Corp and Billonaires in both
sides of this obsolete duopoly system.) This election are not democratic and
won’t change nothing. It will aggravate the current political chaos &
violence. ]]
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Is it fair that consumers pay the gluttony
of big bankers & big WS speculators?
"We
might see a pop of inflation in the first quarter."
Once these price increases are passed
through to consumers, it will likely mark the end to a long period of "low
inflation" that the Fed has constantly leaned on as an excuse to keep
rates low for nearly a decade.
See Chart:
Even such supposedly immune to
day-to-day price fluctuation companies as Apple ,recently
raised prices on its new MacBook Air and iPad Pro products by between
20% and 25%.
See Chart:
"Retailers
understand that when costs go up, something has to give," said Michele Buck, chief executive of
Hershey, last week.
…
…
...
RELATED:
The
nascent FAANG/tech rally is once again in jeopardy with Apple beating on the
top and bottom line, but reporting weaker than expected iPhone sales and
holiday quarter guidance that was soggy at best.
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US-WW ISSUES (Geo Econ, Geo Pol
& global Wars)
Global depression is on…China, RU, Iran
search for State socialis+K-, D rest in limbo
The alternative route will shorten shipment times between India and
Russia...by 40%!
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
Bolsonaro Says Brazil Will Move Embassy to
Jerusalem In politics .. stupidity is contagious!
Jeruslem doesn’t belong to ISR as the
Vatican doesn’t belong to Italy. An embassy there is a tomb to the invader..
This could happen soon .. the international political context is too hot
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sanctions
against Cuba, Nicaragua and Venezuela :
considered US enemies
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Senate for REPs y House .. uncertain.. but possible for Dems.. T’ impeach uncertain
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RT SHOWS
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NOTICIAS IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
REBELION
CULT De
vándalo a celebrity: ¿comprando a Banksy?
Ariane Díaz
ALC Horacio
Machado: ¿Por qué fracaso el progresismo en Am Lat?
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ALAI NET
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RT EN ESPAÑOL
Keiser Report
"La economía mundial sufre
muerte desde el año 2008"
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INFORMATION CLEARING HOUSE
Deep on the US political crisis:
neofascism & internal conflicts that favor WW3
False Flag Terror Acts.. Press Europe To
Sanction Iran By Moon Of Alabama
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US Blames Iran For Impoverishing Civili While
Prepping Further Sanctions
By Caitlin Johnstone
By Caitlin Johnstone
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Is Trump A Fascist? By ICH and Agencies Twelve Signs Of Fascism
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They Thought They Were Free - The Germans,
1933-45 By Milton Mayer
He who doesn’t know that he is a slave,does
not know how to be free
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“Activism is the rent we pay for living on
this planet.” Our rent is due.
COUNTER PUNCH
Analysis on US Politics & Geopolitics
Dana
L. Sinopoli Our Rent is Due Alice
Walker said:
“Activism is
the rent we pay for living on this planet.” Our
rent is due.
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Barry
Lando The
Long, Ugly History of American Antisemitism
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T.J.
Coles Why
a Neoliberal Society Can’t Survive
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that
leads to more business-wars from US-NATO
allies
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DEMOCRACY NOW
Focus on Trump policies & the Econ
& Pol crisis inside US
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PRESS TV
Resume of Global News described by
Iranian observers..
Rouhani
urges Europe to work with Iran to counter US
unilateralism
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