The mountains of negative-yielding sovereign bonds and the protests erupting around the world are indicating that we have passed peak-growth:
“The high price raised eyebrows in bond markets. Investors had refused to lend to Greece at any price during the eurozone’s 2009-2015 debt crisis, leading to three sovereign bailouts. Now, they are paying Athens to look after their cash.
“”…the Greek bond sale is only the tip of an enormous global debt iceberg.
“After an almighty bond rally this year, about $11.5tn of debt — more than a fifth of total debt issued by governments and companies around the world — trades at negative yield. This means investors who hold it to maturity are guaranteed to lose money.
“The rise of sub-zero yields turns standard economic logic on its head…
““Greece selling at negative yields is absurd,” says Mohamed El-Erian, chief economic adviser at Allianz and former boss of bond investing giant Pimco. “It shows you the extent to which markets are distorted. One by one, things that seemed impossible a few years ago have happened.”
“Bond prices have soared as central banks have responded to a slowing global economy with increasingly aggressive easing measures. These have included negative interest rates and huge asset purchases in Japan and the eurozone…
“With global yields at record lows, many investors question whether markets can rally much further. If they cannot, investors buying today are guaranteed to make a loss…
“If there is a pushback, says El-Erian, it will come from the primary market, where investors buy new debt from countries and companies. “That’s where the really big investors get their allocations… If you get a buyers’ strike it will be a sign that people have lost faith in the effectiveness of central banks. Things will get messy very quickly.””
“The plunge in interest rates since the financial crisis is wreaking havoc on pension funds…”
“Yellow vest (gilets jaunes) rallies took place nationwide on Saturday, a year after they first erupted. Tear gas and water cannon were used by police in Paris, where thousands of protesters thronged the streets.
“Rioters unleashed some of the worst violence the city has seen in months.”
“Hundreds of thousands of Czechs thronged the streets of Prague in one of the largest anti-government protests in the country since the fall of communism, calling on their billionaire prime minister to step down.
“The… demonstrations… are part of a global wave of discontent triggered by corruption and abuses of human rights and the rule of law.”
“Bad loans in Turkey have almost doubled since last year’s currency and financial crisis lopped off roughly a third of the Turkish lira’s value, making repayment of loans denominated in dollars or other foreign currencies much more difficult…
“Many of the delinquent loans have been restructured.”
“Karim Daya was one of the last of his friends and family still in Lebanon. Now that his job is gone, he’s packing his bags. “That’s it. It’s just getting worse and worse, and where are we headed?
“Nobody knows,” said Daya, 27, a graphic design graduate. “I’ll be very sad. But there’s no future for me here.””
“Protesters have once again blocked the entrance to Iraq’s Umm Qasr commodities port near Basra, preventing employees and tankers from entering and bringing operations down by 50%, two port sources told Reuters on Monday.
“If the blockage goes on until the afternoon, operations will come to a complete halt…”
“Silence hangs over Quchr, a village in Iranian Kurdistan west of Divandarreh. The people here have seen a considerable suicide toll in recent years…
“Economic instability has been identified as a leading factor behind Iran’s suicide toll as a whole and in the western Kurdish region in particular.”
“Iran’s supreme leader, Ayatollah Ali Khamenei, has backed 50% petrol price increases that have sparked protests across Iran, claiming opponents of the Islamic Republic and foreign enemies were guilty of sabotage…
“Khamenei said on Sunday: “Some people are no doubt worried by this decision … but sabotage and arson is done by hooligans not our people.””
“The causes of [India’s] slowdown are largely known… Economists blame the cash squeeze in non-banking financial companies, which was accompanied by a global demand slowdown.
“Not much can be done about global growth woes. But delayed transmission of interest rates by banks is hampering domestic demand revival, they say.”
“Hong Kong police have trapped hundreds of people inside a university in the city, firing teargas at any protesters trying to escape the campus…
“Hundreds were still trapped inside on Monday, following overnight clashes at Polytechnic University during which protesters launched petrol bombs and arrows at police who threatened to begin using live rounds.”
“Venezuela’s opposition leader Juan Guaido led thousands of his supporters through the streets of the country’s capital on Saturday to demand the departure of President Nicolas Maduro.
“In a speech, Guaido called on his supporters to remain in the streets in the upcoming days, reminding them how civilian action ousted Bolivia’s Evo Morales only six days earlier.”
“Chilean President Sebastian Pinera on Sunday vowed “no impunity” for security forces that used excessive force and violated the rights of protesters during weeks of violent riots over economic policies and social injustice that have left more than 20 dead.”
“At least eight people have been killed in violent clashes in Bolivia after security forces opened fire on supporters of the former president. Evo Morales stepped down following allegations of electoral fraud in the 20 October presidential election that he claimed to have won…
“Those demonstrating said police fired when protesters, including farmers supporting Mr Morales, tried to cross a military checkpoint.”
“The slowdown in dividend payouts by the world’s biggest companies continued in the third quarter as waning profit growth hit shareholder payouts.
“Investors are bracing for further headwinds in 2020 as the global economic picture darkens.”