“Central Banks, from the ECB to the Federal Reserve, are terrified of an economic recession or downturn…
“Given that global debt is 320% of global GDP, a deleveraging cycle will be too large for Central Banks to contain.
“The deleveraging cycle WILL occur, all that Central Banks can do is hope to extend the current cycle long enough that “maybe” economic growth will catch up with the problem and lower the risk.
“The irony is that it is the Central Banks on actions (lowering interest rates to zero and flooding the system with liquidity) which has inflated the debt bubble…
“Never before in human history have we seen so much debt. Government debt, corporate debt, shadow-banking debt, and consumer debt are all at record levels. Not just in the U.S., but all over the world.
“If you are thinking this is a “Goldilocks economy,” “there is no recession in sight,” “Central Banks have this under control,” and that “I am just being bearish,” you would be right.
“But that is also what everyone thought in 2007.”
“In cutting already low interest rates to bolster a sagging global economy, monetary-policy makers risk fueling asset bubbles that may eventually burst and propping up zombie companies that could keep dragging down growth.
“They’re also encouraging a dangerous buildup in leverage in a world where total debt is already approaching $250 trillion.”
“The Federal Open Market Committee (FOMC) of the US Federal Reserve will meet later this week (July 30-31) to take a call on policy interest rates. Financial markets are expecting the Fed to cut interest rates by 25 basis points.
“If it happens, this will be the first cut since the aftermath of the global financial crisis of 2008-2009.”
The most recent estimates in the Permian are that year-over-year production is growing today at just over half the level of a year ago. Production growth there has been in rapid decline since peaking a year ago.”“
“Applying the same analysis that I did last week to Permian Basin production — which looked at year-over-year production changes — it becomes clear that overall U.S. production growth is declining even faster than Permian Basin production growth.”
“A no-deal Brexit has become a very real prospect, a senior figure in UK Prime Minister Boris Johnson’s government has said.
“Writing in The Times newspaper on Sunday, UK Conservative MP Michael Gove said that the UK is now preparing for a no deal on the assumption that the European Union will not renegotiate former Prime Minister Theresa May’s withdrawal agreement.”
“Lack of growth and jobs, and a poor level of consumer confidence, lead to tightening up of family purse strings; and a spiraling crisis of lack of demand, a production slowdown, and more people are out of work.
“With the worsening international scenario and the inability of the [Indian] government to crank up the domestic economy, we seem to be observing the beginning of what could be a long, recessionary cycle.”
“The real estate market in India’s financial hub of Mumbai has been severely hit by the liquidity crisis, making it even more vulnerable than the National Capital Region (NCR), the worst hit in the slowdown so far.
“Mumbai, India’s most valuable real estate market, is grappling with a lack of lenders and is showing deeper signs of distress, reflected in the schemes and discounts offered by developers to push sales…”
“…many companies to put Hong Kong expansion plans on hold,”
““The dramatic slowdown in Hong Kong office demand from Chinese firms is due to a number of simultaneous conditions, almost forming a perfect storm.” …”
“…there are some unofficial estimates. Like one from the Institute of International Finance (IIF) last year, which placed China’s debt to GDP at 300%! Worse, the government’s role as both lender and borrower concentrates rather than disperses credit risks. And that creates the potential of a systemic collapse.”
“Profits earned by China’s industrial firms contracted in June after a brief gain the previous month, fuelling concern that a slowdown in manufacturing from a bruising trade war will drag on economic growth…
“Economic growth in the second quarter slowed to a near 30-year low.”
“China’s lottery sales fell for a fifth straight month in June, slumping 40.7 percent year on year, official data showed.
“Lottery sales totaled 34.77 billion yuan (about 5.05 billion U.S. dollars) last month, down from 35.52 billion yuan in May, according to a statement from the Ministry of Finance.”