“The Organisation for Economic Co-operation and Development (OECD) has warned almost $200 trillion in public and private debt could be the catalyst for another global economic crisis if trust in government and financial institutions deteriorates…
“A decade after “excessive debt” in the housing market brought the global economy to its knees, the OECD said even more debt today could precipitate a loss of trust in financial and political institutions.
“”Should global economic growth and credit conditions continue to deteriorate, a new bout of financial stress could erupt, the financial markets could become more vulnerable to episodes of contagion,” it said.”
“China’s producer price index fell further into contraction, signaling a worsening economic slowdown that threatens to add deflationary pressures to the global economy.
“Factory prices fell 0.8% in August from a year earlier, compared with a decline of 0.9% in the median estimate of economists in a Bloomberg survey.”
“Pork prices in China soared 46.7% year-on-year in August, as the country faced rising shortage of the meat amid a swine fever outbreak which has killed millions of hogs.
“That was a far bigger increase than July’s pork prices which jumped 27% from a year ago.”
“The rapid escalation of the China-US trade war in recent weeks has left Beijing’s policymakers with the choice of two evils: either enlarge the obvious “grey rhino” risk of rising debt or face the unpredictable “black swan” threat of a further economic slowdown, analysts said…
“But Beijing’s policy balancing act might have come to an end last week when the People’s Bank of China announced that it would pump an estimated US$126 billion in additional liquidity into the banking system to boost credit.”
“Ongoing Hong Kong protests have been blamed for a 40-per-cent slump in inbound visitors to the territory in August.
“Given travellers account for about 50 per cent of Hong Kong retail turnover, that figure does not bode well for official retail sales figures for the month, due to be released in early October. A predicted double-digit decline now seems inevitable, especially as the luxury sector is hardest hit by a drop in visitors.”
“Australian business sentiment tumbled in August, suggesting interest-rate cuts and tax relief are failing to rejuvenate the slowing economy.
“A gauge of business confidence slid to 1 from 4, while the conditions index — which measures hiring, sales and profits — slumped to an almost five-year low of 1, the National Australia Bank Ltd. survey showed Tuesday.”
“Some of the stocks worst hit by Brexit uncertainty aren’t in the U.K. They are Irish banks. The Republic of Ireland’s two largest lenders are among the worst-performing European banks this year, according to FactSet data.
“Shares in AIB Group PLC and Bank of Ireland Group PLC began a sharp decline when Boris Johnson took over as the U.K.’s prime minister at the end of July. His determination to pull out of the European Union by Oct. 31 fueled investors’ concerns that he would engineer the exit even without a trade deal…”
“The American middle class is falling deeper into debt to maintain a middle-class lifestyle.
“Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.”
“Federal prosecutors in Manhattan have opened an investigation into possible lending fraud in the New York City taxi industry, the most significant action taken so far in response to widespread practices that trapped thousands of cabdrivers under crushing debt, according to people with knowledge of the inquiry.”
“Global manufacturing is experiencing its sharpest and most geographically widespread downturn in at least six years…The manufacturing slowdown is the main factor dragging on the global economy, fuelling fears that growth is stalling and ramping up pressure on governments and central banks to ready fresh stimulus efforts.
“The gloom is centred on the car industry. Activity across car producers globally reached a near-record low in August…”
“Ford Motor Co. was dealt a blow by Moody’s Investors Service, which cut the carmaker’s credit rating to junk on doubts that a turnaround plan by Chief Executive Officer Jim Hackett will generate earnings and cash quickly enough.
“Moody’s downgraded Ford to the highest junk rating, Ba1, saying the automaker’s cash flow and profit margins are below expectations…”
The crisis at Japanese automotive giant Nissan deepened today, after chief executive Hiroto Saikawa was asked to quit by the company’s board…“
“In July, Nissan reported a 98.5 per cent plunge in operating profit in the first quarter of 2019, and announced it was slashing 12,000 jobs across the globe.”
“Hedge funds are becoming more pessimistic about the outlook for oil prices as trade tensions between the United States and China remain unresolved and global economic growth grinds to a halt…
“Hedge funds and other money managers were net sellers of petroleum futures and options last week for the fifth time in seven weeks, according to an analysis of data published by regulators and exchanges.”
“Insiders at U.S. corporations are selling shares at a pace not seen since before the financial crisis a decade ago. Insiders are people who work as directors or senior officers of companies, whose compensation often includes things like stock options and common shares so they have a vested financial interest in the companies for which they play key roles.
“Because they are so fully invested and have access to data about how their companies are performing before the general public does, some investors believe valuable insights can be gleaned by watching whether insiders are putting more or less of their own money into them.
“If that theory holds water, one message has been coming in loud and clear of late: sell.”