“During the darkest days of the global financial crisis there was a common expression to describe the responses of the world’s central banks: they were “kicking the can down the road”. They kept kicking it for more than a decade but now, it appears, that misshapen can has finally stopped rolling.
“The fear in 2008 was that what was a financial crisis centred on distressed banking systems would morph into a global depression as access to credit evaporated.
“This time the threat is an economic crisis, triggered by the coronavirus, that will trigger financial stresses and corporate failures and, if not a depression, then a global recession.”
“To ease conditions, central banks need to offer a helping hand, according to the International Monetary Fund (IMF).
““Central banks should be ready to provide ample liquidity to banks and non-bank finance companies, particularly to those lending to small and medium-sized enterprises, which may be less prepared to withstand a sharp disruption,” said Gita Gopinath, IMF chief economist.”
https://www.investordaily.com.au/regulation/46662-central-banks-warned-to-loosen-purse-strings
“Donald Trump announced his administration will propose Congress pass a “substantial” coronavirus economic stimulus package as the number of cases and deaths on US soil continue to climb.
“Specifically, the president said at a Monday evening press conference he will ask lawmakers to approve a payroll tax cut and assistance for hourly workers “so that they can be in a position to never miss a paycheck.””
“Italy needs a €500 to €700 billion ($572 billion to $801 billion) precautionary bailout package to help reassure financial markets that the Italian government and banks can meet their debt payment obligations as country’s economic and financial crisis digs in and becomes more fearsome.
“Just as the human costs of the coronavirus have grown alarmingly, Italy’s crisis could soon become unmanageable, potentially causing mayhem in world financial markets.”
“China’s surprise drop into trade deficit over the first two months of the year will raise concerns in Beijing that “the worst is yet to come” for the economy, as the country tries to recover from the shutdown caused by the coronavirus.”
“Market participants have started to prod the Bank of Japan to take action as the world’s third-largest economy is certain to suffer serious setbacks amid the coronavirus outbreak.
“But the central bank is likely to struggle to map out effective steps to grapple with the adverse effects of the novel virus’s spread after years of drastic monetary easing..,”
“Scott Morrison will on Tuesday warn the negative economic impacts of the coronavirus outbreak are potentially greater for Australia than the shocks endured during the global financial crisis (GFC), as the cabinet prepares to sign off on a multibillion-dollar stimulus package targeting households, including with cash to boost consumption, and business.”
“Bank shares plunged Monday as collapsing oil prices and bond yields sparked worry that the widening impact of the coronavirus outbreak could cause a recession.
“JPMorgan Chase, the biggest U.S. bank, fell about 14%, its worst decline since March 2009, when the industry was still in the throes of the financial crisis. Bank of America, the second largest U.S lender, declined 15%…”
“Financial markets haven’t seen conditions deteriorate this quickly since the collapse of Lehman Brothers in 2008, and the situation is only worsening, Bloomberg reported Monday.
“The firm cited a proprietary measure of financial stress, which has weakened quickly in a situation not seen in 12 years.”
“Record-breaking yields in the Treasury market are part of action not seen in bonds for 40 years, according to JP Morgan’s Bob Michele.
“”Liquidity issues in which buyers and sellers are having a hard time coming together on prices are just part of the problem, Michele, the firm’s chief investment officer and head of global fixed income, said Monday…”
https://www.cnbc.com/2020/03/09/bond-market-malfunctioning-part-of-uncharted-times-for-sure.html
“The coronavirus is threatening the global economy and financial markets. But so is another, less obvious peril — the mountain of risky debt issued by companies and bought by investors during the recent economic expansion.”
“Investors are braced for a wave of defaults in the heavily leveraged energy industry as collapsing oil prices send shockwaves through the riskiest corners of debt markets.
“Analysts have predicted that a junk debt meltdown could deepen a global economic slump as investors ditch high-risk credit in favour of safer assets.”
“The scale of this crisis is unprecedented in modern times.
“For weeks, China essentially locked down the entire country.
“Most of the factories ceased production and once-bustling cities became ghost towns. This situation is definitely not something one could fully anticipate or plan for.”
https://phys.org/news/2020-03-coronavirus-affect-global-chain.html
“It is clear that both manufacturing and services activity plunged [globally] in February 2020… This explains the recent rate cut of 50 basis points by the Federal Reserve…
“Since the coronavirus continues to spread globally, there is unlikely to be any respite for the economy in March 2020… the Baltic Dry Index is near the levels seen during the financial crisis of 2008-09.”
https://seekingalpha.com/article/4330755-global-economy-plunged-recession-in-february-2020
“Ultimately, all of these pieces of paper that are furiously being traded on financial … are tied to some company or some household in the real economy.”
https://www.washingtonpost.com/business/2020/03/09/market-crash-was-coming-even-before-coronavirus/
“The globalisation of this possible recession must make it peculiarly hard to counter.
“The tools of economic recovery available to governments are national not international. There is no global treasury to stimulate demand, pump cash into circulation, subsidise employment and maintain investment.”
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