“Households around the world now have $12 trillion more debt than they did during the run-up to the 2008 financial crisis, the Institute of International Finance said in a report this month. Household debt-to-GDP ratios in countries including France, Switzerland, New Zealand and Nigeria have never been higher.
“In Australia, which has the highest household debt levels among G20 nations, the country’s largest lender said on Thursday that its financial assistance lines are receiving eight times the normal call volume. A similar surge in queries has flooded lenders in the U.S., where credit-card balances swelled to an unprecedented $930 billion last year and 3.28 million people filed for jobless benefits during the week ended March 21 — quadruple the previous record.”
https://finance.yahoo.com/news/global-consumer-default-wave-just-000000692.html
“Investors are desperate for clarity on U.S. corporate profits as the coronavirus pandemic has forced them to lower expectations ahead of the first-quarter reporting period starting in mid-April.
“U.S. companies increasingly are withdrawing guidance while warning of the outbreak’s steep toll on operations.”
https://finance.yahoo.com/news/bracing-worst-u-earnings-pandemic-110000819.html
““The forthcoming financial crisis will make the Financial Crisis of 2007-2009 look like child’s play. No financial crisis since the Great Depression will be remotely comparable…
“Although many US industries will undoubtedly be “rescued,” it’s unlikely that common equity shareholders of publicly held corporations will be fully “bailed out” – and some will not be bailed out at all.
“There’s little political appetite in the US to provide bailouts for common equity shareholders of large corporations.”
https://seekingalpha.com/article/4334820-next-leg-down-another-massive-decline-is-coming
“The Federal Reserve thus far has unleashed what’s frequently been called a bazooka in its efforts to calm markets. Its next step could be to go nuclear.
“Should conditions on Wall Street deteriorate significantly, the central bank could go where it’s never gone before, into the equity market…”
“Governments and central banks need to step up efforts urgently to support their economies in the face of the coronavirus crisis, the head of the Bank for International Settlements said on Sunday…
“Rules brought in after the 2008 crash were designed to prevent banks overextending themselves, but the worry now is that they are not stepping in and lending when the capital markets have slammed shut for many firms.”
“The G-20 leaders made major promises, but their words did not offer hope to a world dealing with a pandemic…. the top 20 economies, which control 80%t of all the world’s wealth, waited too long to formulate a joint response… Another problem is that the G-20 hasn’t taken enough concrete steps… it seems that world leaders are still unable to grasp how seriously the pandemic will impact the rest of the world.
“Thirdly, the G-20 leaders discussed the urgent needs of African nations, developing countries and refugees without formulating a common, global vision.”
“There is now almost universal agreement among economists, think tanks and policy makers the global economy is heading into a recession due in the wake of the ongoing coronavirus health crisis.
“Nowhere is that more clear than in Africa.”
https://qz.com/africa/1828110/coronavirus-africa-faces-recession-debt-problems-commodity-hit/
“For Minsky, prolonged periods of economic and financial market prosperity were condemned to sowing the seeds of a crisis endgame.
“An excessive accumulation of leveraged risk-taking would ultimately give way to amplified risk reduction and deleveraging in a debt deflationary downward spiral for financial asset values.”
“Governments are softening the blow of COVID-19 by throwing a lot of money at it. This increase in Quantitative Easing (QE) could release inflation pressures that have been held at bay so far.
“Inflation will require increases in interest rates, which in turn can launch the feared Debt Spiral.”
“The global oil market is broken, overwhelmed by an unmanageable surplus as virus lockdowns cascade through the world’s largest economies.
“Onshore tanks in many markets are full, forcing traders to store excess oil in idle supertankers. Refineries are starting to shut down because nobody needs the fuels they produce. In physical oil markets, barrels are already changing hands for less than $10…”
“The IEA has warned that global oil demand is likely to fall by a staggering 20 million bpd amid a global lockdown due to the coronavirus pandemic.”
https://oilprice.com/Energy/Energy-General/Refiners-Are-Having-To-Pay-To-Produce-Gasoline.html
“As the oil and gas firms go into crisis, the banks that extended them credit may also face defaults.”
https://www.commondreams.org/views/2020/03/28/our-economy-sick-beast-corporate-debt-crisis-explained
“U.S. lender Capital One Financial Corp got a waiver from the Commodity Futures Trading Commission (CFTC) after plunging oil prices increased the bank’s derivatives exposure above a key regulatory threshold, according to two sources with knowledge of the matter.”
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