“Global debt has hit an all-time high of $188 trillion, which is more than double the output of the global economy, the IMF warned today.
“The global debt load has surged to a new record of around 230 per cent of world’s output, IMF chief Kristalina Georgieva said.
“While private sector borrowing accounts for the vast majority of the total, the rise puts governments and individuals at risk if the economy slows, she said.
“‘Global debt – both public and private – has reached an all-time high of $188 trillion. This amounts to about 230 per cent of world output,’ Georgieva said in a speech to open a two-day conference on debt.
“That is up from the previous record of $164 trillion in 2016, according to IMF figures.
“While interest rates remain low, borrowers can use debt to make investments in productive activities or weather a bout of low commodity prices.
“But it can become ‘a drag on growth’, she said.
“‘The bottom line is that high debt burdens have left many governments, companies, and households vulnerable to a sudden tightening of financial conditions,’ she cautioned.”
“Low liquidity is creating higher volatility this earnings season. Stocks boosted by earnings are moving more than normal. Liquidity has reached some of its lowest points in a decade.
“Low liquidity preceded the 2007-2008 financial crisis.”
“Financial markets have seen this story before: The Federal Reserve rides in with piles of freshly minted digitized money that helps send the prices of stocks and other assets lurching forward.
“But this isn’t 2009…
““This really speaks to the idea that once again we’re on the brink of potentially being in this bubble, where valuations are about the story and the narrative and not about the cash flow and profits,” she said. “You would think we would have learned this lesson before. But here we go again,” said Lisa Shalett, chief investment officer at Morgan Stanley Asset Management.”
“The growth outlook for the British economy has deteriorated largely as a result of a gloomier global backdrop, the Bank of England said Thursday as it refrained from cutting rates in the run-up to a general election that could have huge repercussions on Brexit.”
“Investors withdrew a net £676m from UK equity funds in September as part of a widespread exodus from equity markets. Every single equity market sector in the Investment Association universe had outflows in September…
“Over the three months to the end of September, a total of £2.3bn was withdrawn from UK equity funds, the worst quarter in history…”
“[UK] High street sales took a battering in the last week of October amid political upheaval as retailers face a “perfect storm” in the crucial Christmas trading period, new figures suggest.
“According to the latest BDO High Street Sales Tracker, retailers failed to stem the sales plunge despite deep autumn discounting and early seasonal promotions.”
“Brussels has cut its growth forecasts for the eurozone to their lowest level since the height of the bloc’s sovereign debt crisis, warning the slowdown will persist for at least the next two years.”
Italy’s debt now riskier than Greece’s!
“Italy’s bond yields rose above those of three-time bailout recipient Greece on Thursday for the first time in more than a decade, amid expectations that political uncertainty will return in Italy and economic reforms had taken hold in Greece.”
“In Lebanon, corruption induced by debt has reached gigantic proportions, with serious consequences for the state and society alike. Debt is the primary source of lawful enrichment.
“Lebanon has become the world’s third most indebted nation, with public debt estimated at $80bn in 2018 – a whopping 151 percent of GDP. “
“Iraqi security forces killed 10 and wounded dozens on Thursday in another day of deadly protests that show no sign of letting up.
“In central Baghdad, security forces fired live rounds and tear gas at demonstrators who were attempting to remove barricades blocking their protest march. Six were killed and at least 41 injured.”
“A senior Iranian official said Tehran’s decision to increase its nuclear activity for the fourth time this year should act as a “wake-up call” for European signatories of Tehran’s 2015 atomic accord to resolve the deepening crisis.
“Hamid Baeidinejad… added that Iran would continue to increase its nuclear activity every two months unless it received the economic benefits it was promised when it signed the nuclear deal with the US, France, Germany, the UK, China and Russia.”
“A Hong Kong student has died after falling during protests on Monday – sparking impromptu protests and vigils from pro-democracy activists. Alex Chow fell from the ledge of a car park… The exact circumstances of his fall are unclear, but reports say he was trying to get away from tear gas.
“The 22-year-old’s death came after another week of political violence in Hong Kong.”
“The land Down Under… holds the world record for going for the longest time without a recession.
“The economy, however, is growing at the slowest pace since the global financial crisis a decade ago and retail sales in the year to September have suffered the biggest annual drop in 28 years, the Australian Bureau of Statistics revealed this week.”
“Argentina’s central bank has roughly $10 billion to its name and its government owes the International Monetary Fund around $22 billion in 2022 and another $22 billion in 2023.
“Even if the IMF cut that in half to $11 billion in 2022 it is still $1 billion more than the government has in reserves. And that doesn’t count the billions it owes this year and next in both local currency and foreign, dollar denominated debt.”
“In a spasm of violence related to last month’s disputed presidential election, protesters kidnapped the mayor of a small town in central
“Bolivia on Wednesday, forcibly cut her hair, drenched her with red paint, made her sign an improvised resignation letter, then marched her through the streets barefoot, witnesses said.”
“A Chilean police major who shot two students during a school protest has been arrested as a wave of political unrest enters a third week and the number of injured in street violence topped 2,000.
“Maj Humberto Tapia was arrested by detectives on Thursday and charged with illegally discharging his shotgun inside a public school…”
“Financial markets roil and the banking system groans. The US Federal Reserve cuts interest rates, even as Chairman Jerome Powell claims that he expects the economy to remain strong.
“Meanwhile, the Fed is forced to intervene to lend emergency cash to banks shoring up their positions for the first time in ten years. As an already-struggling working class glimpses the early outlines of yet another mounting crisis, fears of recession mount.
“And well they should.
“The global economy is clearly headed for another recession…”