Posts Tagged ‘governments’

The Straight Scoop

The Straight Scoop

Courtesy of Michael Panzner at Financial Armageddon 

Red backhoe scooper

You’ve heard what the clueless analysts, disingenuous policymakers, conflicted Wall Street paper-pushers, and corporate cheerleaders have had to say about the so-called recovery. Now listen to what one of the world’s largest private companies — which presumbaly means they don’t have to worry too much about "managing" expectations or convincing the masses to believe in financial fairytales — has to say about where things stand:

"Cargill Sounds Warning of a Slow Recovery" (Financial Times)

Cargill, the world’s largest agricultural commodities trader, on Tuesday warned that the global economic recovery had yet to gain traction as it reported a second straight decline in annual profit.

As economists debate the merits of government intervention to avoid a double-dip recession, the company said the economic outlook was uncertain.

“More uncertainty lies ahead, for the world has yet to transition from a policy-stimulated upturn to a structurally sustained recovery,” Cargill said in its annual report. “Europe’s debt crisis and China’s monetary tightening are moving markets. Governments have made promises that their economies cannot fulfil. Regulations are changing in unpredictable ways.”

The Minnesota-based company has a unique vantage on global economic trends, trading commodities from corn to oil to salt with employees in 66 countries. 


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Do sovereign debt ratios matter?

Do sovereign debt ratios matter?

Courtesy of Michael Pettis at China Financial Markets 

Flags flutter in front of the headquarters of Spain's largest savings bank La Caixa in Barcelona July 23, 2010. European Union bank stress tests due from regulators on Friday aim to bolster confidence in the sector by making clear which lenders are healthy and which need to raise capital. Tests on 91 financial institutions from 20 of the EU's 27 nations simulate worsened economic conditions including declines in the value of sovereign debt they hold. REUTERS/Albert Gea (SPAIN - Tags: BUSINESS IMAGES OF THE DAY)

In the past few weeks I have been getting a lot of questions about serial sovereign defaults and how to predict which countries will or won’t suspend debt payments or otherwise get into trouble.  The most common question is whether or not there is a threshold of debt (measured, say, against total GDP) above which we need to start worrying.

Perhaps because I started my career in 1987 trading defaulted and restructured bank loans during the LDC Crisis, I have spent the last 30 years as a finance history junky, obsessively reading everything I can about the history of financial markets, banking and sovereign debt crises, and international capital flows. My book, The Volatility Machine, published in 2002, examines the past 200 years of international financial crises in order to derive a theory of debt crisis using the work of Hyman Minsky and Charles Kindleberger.

No aspect of history seems to repeat itself quite as regularly as financial history.  The written history of financial crises dates back at least as far back as the reign of Tiberius, when we have very good accounts of Rome’s 33 AD real estate crisis.  No one reading about that particular crisis will find any of it strange or unfamiliar – least of all the 100-million-sesterces interest-free loan the emperor had to provide (without even having read Bagehot) in order to end the panic.

So although I am not smart enough to tell you who will or won’t default (I have my suspicions however), based on my historical reading and experiences, I think there are two statements that I can make with confidence.  First, we have only begun the period of sovereign default.

The major global adjustments haven’t yet taken place and until they do, we won’t have seen the full consequences of the global crisis, although already Monday’s New York Times had an article in which some commentators all but declared the European crisis yesterday’s news.

Just two months ago, Europe’s sovereign debt problems seemed grave enough to imperil the global economic recovery. Now, at least some investors are treating it as the crisis that wasn’t.

The article goes on to quote Jean-Claude Trichet sniffing over the “tendency among some investors and market participants to underestimate Europe’s ability to take bold decisions.”  Of course I’d be more impressed with…
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A Frightening Build-Up

A Frightening Build-Up

Courtesy of Michael Panzner at Financial Armageddon 

Although there are many reasons why it was not a good idea to keep dead and dying businesses alive, to spend and borrow hundreds of billions of dollars for ill-conceived stimulus programs and other boondoggles, to keep interest rates at record lows for an extended period of time, and to encourage people to hang on in hope that a recovery was just around the corner, the biggest issue with not facing the music early on is how daunting the problems have now become. As the New York Times notes in "Crisis Awaits World’s Banks as Trillions Come Due," the scale of short-term obligations that have built-up as a result of the decision to extend and pretend — or delay and pray — is frightening, to say the least.

FRANKFURT— The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years.

The European Central Bank, the Bank of England and the International Monetary Fund have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is.

Their concern is that banks hungry for refinancing will compete with governments — which also must roll over huge sums — for the bond market’s favor. As a result, credit for business and consumers could become more costly and scarce, with unpleasant consequences for economic growth.

“There is a cliff we are racing toward — it’s huge,” said Richard Barwell, an economist at Royal Bank of Scotland and formerly a senior economist at the Bank of England, Britain’s central bank. “No one seems to be talking about it that much.” But, he added, “it’s of first-order importance for lending and output.”

Banks worldwide owe nearly $5 trillion to bondholders and other creditors that will come due through 2012, according to estimates by the Bank for International Settlements. About $2.6 trillion of the liabilities are in Europe.

U.S. banks must refinance about $1.3 trillion through 2012. While that sum is nothing to scoff at, analysts seem most concerned about Europe because the banking system there is already weighed down by the sovereign debt crisis.

How banks will come up


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Phil's Favorites

Why companies as diverse as eBay, IKEA and Mars are increasingly supporting US clean energy policies

 

Why companies as diverse as eBay, IKEA and Mars are increasingly supporting US clean energy policies

A worker checks the installation of a solar panel array atop an IKEA store in Miami. AP Photo/J Pat Carter

Courtesy of Zdravka Tzankova, Vanderbilt University

The Research Brief is a short take about interesting academic work.

The big idea

My new analysis of companies that seek to buy renewable electricity finds that business is becoming a powerful new ally i...



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ValueWalk

FedEx Corp.: Fundamentals Support the Price Increase

By F.A.S.T. Graphs. Originally published at ValueWalk.

Introduction

After reporting better than 4th quarter results on Tuesday, the stock price of FedEx Corporation (NYSE:FDX) has been on a tear. With this article, I plan to demonstrate that the fundamentals support the current price rise. Moreover, the fundamentals also suggest that it is not too late to take a long-term position in this leading air freight and logistics company.

Q1 2020 hedge fund letters, conferences and more

Yesterday, FedEx reported a surge in quarterly adjusted earnings of $2.53 per share compared to expectations of $1.52 per s...



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Zero Hedge

North Carolina 3rd State To Report Record Jump In COVID-19 Cases As Trump Changes Mind On Masks: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • North Carolina reports record jump in COVID-19 cases
  • Trump does U-turn on masks
  • California orders LA restaurants to close for 3 weeks
  • Apple closes another 30 stores
  • Atlanta Airport closes
  • California reports another record jump
  • Houston ICUS at 102% capacity
  • Nevada reports third-highest daily total yet
  • NY releases Wednesday numb...


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Kimble Charting Solutions

Gold / Dollar Ratio Sending Bullish Message To Gold Bugs!

Courtesy of Chris Kimble

It’s been a good year for gold bugs!

Gold has outperformed several asset classes as volatility and general economic uncertainty have come back to the forefront.

In today’s chart, we look at the ratio of Gold to the U.S. Dollar on a “monthly” basis. Gold bulls want to see this ratio trending higher… and it is.

In fact, the rise has taken the Gold ratio to an important juncture. It is working on a dual breakout at point (2).

Thus far, price is well above horizontal resistance marked by (1), and just above trend resistance at (2). Should the breakout hold, it would be historically bullish for Gold (and precious metals). Stay tuned!

This ar...



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Biotech/COVID-19

The US isn't in a second wave of coronavirus - the first wave never ended

 

The US isn't in a second wave of coronavirus – the first wave never ended

The U.S. as a whole is facing a huge surge in coronavirus cases, but the differences between states like New York and Florida are striking. Kena Betancur/1207979953 via Getty Images

Courtesy of Melissa Hawkins, American University

After sustained declines in the number of COVID-19 cases over recent months, restrictions are starting to ...



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The Technical Traders

Long-Term Consumer Discretionary Winners

Courtesy of Technical Traders

I was live on TD Ameritrade TV talking about consumer discretionary, staples, and utility sectors. Explained is a unique crossover on how some discretionary stocks are also becoming a consumer staple.

Get My ETF Trade Signals, Entry, Targets, and Stop Levels – CLICK HERE ...

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Chart School

US Dollar with Ney and Gann Angles

Courtesy of Read the Ticker

Where is price going, is there strength or weakness in the chart?


Previous Post on the US Dollar : Where is the US Dollar trend headed ?


The question is always what will the future price action look like ?


This post will highlight the use of lines generated by angles. Not trend lines, as trend lines require two known points on a chart, where as angles require only one known point and a angle degree to draw a line. The question then becomes how is the angle degree determined.



There are two theories: ...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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