MAY 25 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
Gold is
soaring due to investor concerns with reserve currencies in an era of record
budget deficits, in turn motivating long-term concerns about sovereign risk in
Europe and inflation or fiscal irresponsibility elsewhere.
The lack of dispersion shouldn’t be
"misread as investor comfort with these reserve
assets in an era of record budget deficits from high starting levels of
indebtedness, in turn motivating
long-term concerns about sovereign risk in Europe and inflation or fiscal
irresponsibility elsewhere" as JPMorgan writes in its Weekly
Asset View report authored by John Normand.
SEE CHART:
Indeed, as
the bank ominously continues, these background concerns may partly explain why
Gold, "which is the world’s legacy reserve asset", has
made or is nearing all-time highs versus the euro, yen, sterling, Swiss franc
and the dollar (9% from an all-time high) even as the trade-weighted dollar
creeps higher.
SEE CHART:
Gold has
reached or is nearing all time highs
But what is enough growth does
not return to put fiscal policy on a more efficient path? What if, instead, the entire world turns into China where the
only economic growth comes from flooding the economy with debt, resulting in
massive malinvestment and an avalanche of defaults just waiting to begin?
SEE CHART:
Indeed,
what if the world is has crossed the Rubicon where the marginal
utility of debt is collapsing and it takes
exponentially more leverage to create even the smallest uptick in growth.
SEE CHART:
What
happens to gold then?
….
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"Rising
bankruptcies and delinquencies suggest
the default
cycle has started."
….
Goldman writes this morning that
with businesses shuttered and job losses mounting rapidly, "there is growing concern over the ability of borrowers
to service their debt obligations and the resulting risks to financial stability."
In response, Goldman "assesses
the likely scale of economy-wide credit losses, the exposure of creditors to
those losses, and the potential risks to financial stability and the banking
sector" to conclude that "rising bankruptcies and delinquencies suggest the default cycle has
started."
How did Goldman get to that
assessment?
Looking at
corporate credit, the bank first looked at corporate debt, noting that
nonfinancial corporate debt grew by over 60% since 2011 and recently rose to an
all-time high as a share of GDP (Exhibit 1, left), leading to growing concern even prior to the virus that corporate
defaults could rise dramatically in the next downturn.
Meanwhile, the sharp decline in revenues across many
industries has left a large share of companies with negative cash flow, and
rising bankruptcy filings and cases suggest the corporate default cycle has
started.
SEE CHARTs:
Corporate
Debt as a share of GDP Rose significantly Prior to the virus
Unlike the financial crisis, the
bank finds that a unique feature of this downturn "is the wide variation in industry exposure to the virus, with physical
constraints on spending, occupational health risks, and geographical variation
in the virus outbreak affecting industries differently."
Goldman then performs an analysis
of which industries are most impacted by credit losses due to the corona crisis,
and summarizes the findings in the next chart, which
shows a coarser breakdown of virus-impacted industries, as well as their market
share in the high-yield corporate bond space.
SEE CHART:
The energy sector stands out both
in terms of its size and default risks, given the collapse in oil demand, its
disproportionately large footprint in the corporate bond market relative to its
GDP share, and the heavy amounts of leverage in the sector. Roughly half of high-yield corporate bonds are in the energy
or virus-impacted industries, according to Goldman which adds that its credit
strategists "estimate that the 12-month trailing high-yield default rate
will increase to 13% by the end of 2020, similar to the peak rate reached
during the Global Financial Crisis (Exhibit 3, bottom)."
SEE CHART:
In addition to energy debt, another
key area of concern - as we have repeatedly pounded the table
in recent weeks - is commercial real estate (CRE), given signs of
overheating and overstretched valuations prior to the virus, as well as the unprecedented
declines in demand in industries such as lodging, healthcare, and retail.
Commercial
real estate prices have outpaced single family house prices since the prior
downturn (chart below, left), with CRE capitalization rates falling to
historically low levels. Late payments on commercial mortgages have picked up
sharply in recent months, suggesting mounting pressures (chart below, right
SEE CHARTS:
Goldman finds that while there is
dispersion among the largest banks in their exposure to losses, almost all of
the largest banks today are less vulnerable than the median large bank was
prior to the financial crisis, thus invalidating the
entire analysis for the simple reason that the current crisis may end up being
far more dire to bank loans than 2008/2009 if an economic recovery isnt
forthcoming in short notice
SEE CHART:
In summary,
Goldman finds that while financial stability concerns appear manageable,
significant downside risks remain. A slower than expected recovery and a
prolonged downturn would likely stress the banking system further, and a
growing share of riskier lending is now done by less regulated nonbank
financial institutions, where risks are harder to assess.
Its conclusion: "Should a
more adverse scenario arise, Fed officials have indicated the willingness to
further help facilitate the provision of credit by the financial system."
In other words, if the coming default crisis ends up being as bad as the GFC,
the Fed will end up owning a whole lot more bankrupt bonds and loans than just
Hertz.
….
See more
charts at:
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"It hasn’t happened yet, but it will. That’s when the party really ends..."
Money printing by the Fed and Congress is off
the charts.
The Federal Reserve doubled its balance sheet in a matter of months,
and Congress is pumping out trillions of dollars in spending bills to fight the
economic crisis caused by the Covid 19 lockdown. The really scary thing is not
the massive money printing, but the fact that absolutely nobody seems to care
about the risk to the U.S. dollar
Money manager Peter Schiff thinks he knows
why, and explains:
The reason is they have
been lulled into this false sense of complacency in that we got away with it
the last time... and there was no negative consequence.
We didn’t have runaway inflation and did not have loss of confidence in
the dollar. So, there was no price to be paid...
"We are printing all this
money. The Fed is buying all these bonds. . . . This is it. The Fed is going all in on QE. There is no
limit. They are printing all this money,
and, so, ultimately, the dollar is going to tank. It hasn’t happened yet, but it will. That’s
when the party really ends. That’s when there is massive pressure
on consumer prices. That’s when there is massive (upward) pressure on interest
rates. . . .
This could be an inflationary depression. We could have hyper-inflation. We didn’t have anything like
that in the Great Depression.
During the 1930’s, prices went down, and people got some relief with
lower prices. That made the downturn not as bad.
Imagine high unemployment with the cost of
living skyrocketing. That’s what we are heading for. It’s going to be the
1970’s only on steroids because it’s going to be a much deeper economic
contraction with a much bigger increase in consumer prices.”
Schiff says, “When we reopen, nothing will be
the same because we will not be able to reflate this bubble.”
So what do you do? Precious metals are a no-brainer investment.
Schiff says,
“It’s not that gold is gaining
in value, it’s that fiat currencies are all losing value. Gold is the one stable factor. It’s the one
thing governments can’t create out of thin air. Every currency in the world,
except the dollar, are hitting new record lows against gold. You need more
Euros, Rands or Aussie dollars to buy an ounce of gold. . . .
The U.S. dollar is losing value
more slowly, but this is going to change. We are going to win the race to the
bottom...
SEE CHART:
USD VS FIAT and USD VS GOLD
People need to convert their dollars now into
gold or silver. If you think the price of gold is going up now, wait til the
dollar is the weakest of the currencies. . . . That’s going to accelerate the appreciation of gold . . . and that’s going to put gold in the spotlight as the replacement
to the U.S. dollar as the main reserve asset for global central banks.”
LISTEN VIDEO: Buy gold
& silver now
….
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
Defenders of lockdowns will likely continue to
claim that "we have no
choice" but to continue lockdowns... as the world faces the
worst economic disaster experienced
in centuries. It didn't have to be this way...
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“Demography, however,
is destiny for
entitlements, so arithmetic will do themeddling...”
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“The millions of
casualties of a continued shutdown
will be hiding in plain
sight.”
====
17 days
have passed since VA. started reopening.
SEE CHART:
The chart
below reflects the change over the past few days, which reflect how Latin
America has finally nudged past the US.
See CHART:
In the US,
the death toll stands
just 700 shy of 100k deaths, with many expecting
the grim milestone to finally be reached on Monday after a narrow miss on
Sunday.
SEE CHART:
Fascism
blocked
Meanwhile,
confirmed cases in the US are closing in on 1.75 million, while the global
outbreak approaches 5.5 million.
SEE CHART:
Also
blocked by Fascism in America
FREEDOM OF EPRESSION in AMERICA IS
BEING CANCELED
Is this the
way to celebrate “MEMORIAL DAY”?
….
….
FALSE vs
REAL MEMORY
Hugo Adan
5/25/20
Do we really have memory of the
amount of genocides committed since Mỹ
Lai Massacre in Sơn Tịnh District, South
Vietnam, on 16 March 1968. Between 347 and 504 unarmed people were killed
by U.S. Army soldiers. Victims included men, women, children, and infants. Some
of the women were gang-raped and their bodies mutilated. https://en.wikipedia.org/wiki/My_Lai_Massacre
.
That was WAR. WARS are TOTAL DEHUMANIZATION. The Barbary
in N-Korean war & recently in Syria (cities totally destroyed & mill of
entire families submitted to inhuman barbarie when forced to migrate after
being submitter to bio-chemical attacks.. that is worse than Mỹ Lai Massacre.
MEMORY? We don’t have memory, what we have is fake
veneration to the myth of IMPUNITY, that
is that exist behind one more festivity of fake National Patriotism.
The FACT is that we did not defend our NATION in none of the WARS ABROAD.. what we defend is the BUSINESS of WAR that
bring a lot of money to few big Corp who manufacture weapons & Corp that
provide all the parafenalia for our soldiers to risk their life outside.
WE DO HAVE MORAL OBLIGATION WITH SOLDIERS DISABLED DURING WAR. I do belong to DAV and send some support to
these soldiers and their families. I will do it forever, but my support to DAV does not mean that I am
in favor of WAR.
Fortunately the chances of
WW3 arrived to its end. MAD (mutual assured destruction) is real . There won’t be winners, only destruction & more pandemias.
The real war now is for PEACE: DISMANTLE NUKES and its parasitic institutions like NATO +
PENTA.
The waste of money in war should be invested in best health and education
for all. And IN best scientific support
to create the new vaccine to stop the 2nd round of COVID-19.
The families of Dissabled American Veterans need 100% support
in health & education for at least three generations onward. Yo seguiré apoyando DAV hasta donde me alcance
la vida.
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La mafia Clinton is back?
They represent the worse corruption in US politics
"The
conditions must pass constitutional scrutiny."
====
"We’re
dealing here with a highly contagious and often fatal disease for which there presently is no known
cure..."
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At that end
point, no matter how many monetary magic wands are waved, the real economy is
unresponsive, monetary policy is utterly impotent.
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State
socialis+K-, D rest in limbo
"As
the US is entangled in the COVID-19 epidemic, its actual ability to intervene
externally is weakening. The White House claimed it would impose sanctions on
China, but the tools and resources at its disposal are fewer than those it
could mobilize before the outbreak. It is only bluffing"
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
- Hydroxychloroquine: WHO Pauses Trial of Drug
Trump Took as COVID-19 Prevention Amid Safety Concerns
- Australian
Prime Minister Rolls Out Plan to Save Economy as China Slaps Tariffs on
Country's Exports
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
REBELION
PARA MANIANA
EL RESTO
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