“Global recession now baked into the cake. Six Key Points:
“1. Global Manufacturing PMI slumps to 47.2
2. Survey-record contraction in China; rest of the world stagnates on average
3. Global trade falls at fastest pace since April 2009
4. Global Manufacturing Decline Steepest Since 2009
5. Manufacturing employment declined for the third successive month in February, with the rate of job losses the fastest since August 2009.
6. Purchasing activity declined to the greatest extent in the series history (which started in October 2009).”
If the stock markets had not already forfeited all credibility as a reasonable barometer of investor confidence and corporate profitability they may have now.
“Stocks rose sharply on Wall Street Monday as traders hope that central banks will take action to help shelter the global economy from the effects of the coronavirus outbreak. The market recouped part of the losses it took in a seven-day rout that gave stocks their worst week since the financial crisis of 2008.”
https://www.politico.com/news/2020/03/02/dow-surges-central-bank-help-economy-118907
“The largest bank lobbying group in the US, the Bank Policy Institute, is now leveraging the coronavirus to pressure the Fed to relax nettlesome banking regulations imposed on banks after the Financial Crisis.
“These regulations, particularly the liquidity and capital requirements, were imposed on banks in order to avoid a replay of the Financial Crisis.”
“UK and Scottish government modelling shows that the economic and fiscal costs of a Covid-19 epidemic could be on a par with the costs of the 2008 banking crisis.
“According to a senior government source: ‘that is what our modelling shows’.”
https://beta.spectator.co.uk/article/coronavirus-could-cost-britain-as-much-as-the-2008-crash
“Shares in European banks have been among the worst hit since the virus began to spread, first through Italy, and now through much of the rest of the region.
“Their stocks took another hammering Monday amid signs the impact of the virus is starting to hurt economies, which has immediate effects on banks’ business of taking and lending money.”
https://www.wsj.com/articles/coronavirus-heaps-misery-on-europes-ailing-banks-11583158487
“The Reserve Bank of Australia has cut official interest rates to a new record low of 0.5% due to the “significant effect” of the coronavirus outbreak on the Australian economy and has signalled it is prepared to cut further if needed.”
“Automakers and department store operators [in Japan] reported sharp sales declines in February as the spread of the new coronavirus dented consumer sentiment and drove away foreign tourists.
“The weak data came as analysts warned of a second consecutive quarter of contraction in January to March, with Japan on the brink of recession since the consumption tax hike in October.”
https://www.japantimes.co.jp/news/2020/03/03/business/sales-new-autos-10-3-japan/#.Xl4bD6j7TIU
“Central banks around the world are trying to keep investors calm as the coronavirus outbreak continues to deliver blows to financial markets and the world economy.
“Policymakers at major central banks say they are prepared to take steps as necessary to limit the damage caused by the virus as investors try to turn the page on the worst week for stocks since the global financial crisis.”
https://edition.cnn.com/2020/03/02/business/oecd-global-economy/index.html
“The recent slump in Brent Crude prices follows a similar pattern of past slowdowns in global factory output, sparking fears that the market’s fear is not only based on the coronavirus.
“Central banks around the world are widely expected step up rate cuts to help economies amid the slowdown in manufacturing activity.”
https://oilprice.com/Energy/Crude-Oil/The-Odds-Are-Stacked-Against-Oil-As-Recession-Looms.html
“…the next recession is likely to emanate from China, and indeed may already be under way. China is a highly leveraged economy, it cannot afford a sustained pause today anymore than fast-growing 1980s Japan could. People, businesses and municipalities need funds to pay back their out-size debts…
“Policymakers need to recognise that, besides interest rate cuts and fiscal stimulus, the huge shock to global supply chains also needs to be addressed. The most immediate relief could come from the US sharply scaling back its trade-war tariffs, thereby calming markets, exhibiting statesmanship with China, and putting money in the pockets of US consumers. A global recession is a time for cooperation, not isolation.”
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