“At some point… the question will be not whether borrowers can keep borrowing, but whether they can afford the obligations they’ve taken on.
“Many entered the crisis more indebted than ever. As of March 31, nonfinancial corporate debt in the U.S. stood at $10.5 trillion, or 48.7% of gross domestic product — the highest level on records going back to 1950. An unusually large share of that consists of bonds issued by companies with the lowest investment-grade ratings, or of so-called leveraged loans to even riskier enterprises.
“Household debt stands at more than 75% of GDP.”
“If the US Federal Reserve Board does what markets are expecting, indeed demanding, and implements yield curve control, it will create something quite unprecedented:
“The world’s most powerful central bank will control not just the volume of money in the world’s largest economy, but also its price.”
“The US Federal Reserve is prepared to spend at least $24bn to purchase corporate bonds issued by oil and gas companies as part of a broader effort to support US corporations’ access to financial markets amid a severe recession.”
“If the last economic crisis taught us anything about schools, it is that the economic shock will fall most heavily on those children who are most in need of education.
“Without proper policy efforts to cushion the current economic blow to both schools and families, the cycle from the past is destined to repeat. As with the Great Recession, the current economic crisis will not create inequality, but it will bring into sharper relief and deepen the existing differences that we ignore all too often.”
“The UK economy shrank more than first thought between January and March, contracting 2.2% in the joint largest fall since 1979, official figures show… There was a significant economic impact in March, as the coronavirus pandemic began to have an effect.”
“The number of new UK mortgage approvals for house purchase fell further to a hit a record low in May as the coronavirus crisis continues to grip the housing market…
“Lenders have been axing mortgages for people with small deposits amid fears of a house price crash, which could plunge buyers into negative equity and limit the money banks can recoup if they need to repossess homes.”
“Weekly spend in UK food service in April 2020 was just over £200 million, compared to April 2019’s weekly spend level of around £1 billion.
“The report from NPD Group found that although lockdown officially started on 23 March, many people were already avoiding eating out.”
“Burger chain Byron is scrambling to find a buyer who can stave off impending financial collapse, save 1,200 jobs, and reopen its 52 restaurants in the UK by mid-next month.
“The company has filed a notice of intention to appoint administrators…”
“More than 300,000 planned new homes [UK] may remain on the drawing board over the next five years, deepening the UK’s housing crisis…
“Construction of the cheapest social housing could fall to a “catastrophic” low of 4,300 units annually – the smallest number since the second world war. Shelter said this would not even be enough to clear the waiting list for a social home in Wakefield, never mind the rest of the country.”
“French Finance Minister Bruno Le Maire proposed splitting off the debt piled up as a result of emergency spending to tackle the coronavirus and spreading out repayments over years.”
“Banca Monte dei Paschi di Siena said late on 29 June that it has approved a plan to transfer non-performing exposures, deferred tax assets, other assets, financial debt, other liabilities and net equity to Asset Management Company, an Italian state-owned manager of bad loans.”
“Argentina’s economy plunged more than expected in April as commerce ground to a halt during the nation’s first full month of a strict Covid-19 quarantine.
“Economic activity fell 17.5% from the prior month in South America’s second-largest economy, and 26.4% from a year ago, the government reported Monday. That was worse than the expectation of a 23% drop…”
“The latest rally, which has seen Brent rise to just over $40 per barrel, has provided little relief for Colombian oil producers. That price is below the breakeven price for many Colombian drillers…This has instigated considerable fallout for Colombia’s oil industry and ultimately the economy.
“The Latin American nation, the region’s fourth-largest oil producer, bet its economic future on oil…”
“Nigerian cocoa farmers and exporters are facing a serious economic crisis caused by the global coronavirus lockdown.
“Huge losses are being recorded daily as cocoa stays in the country’s warehouses because of restrictions at destination ports, meaning the longer it sits the more it decreases in weight, reducing its value.
“The country’s farmers are also suffering from a lack of pesticides needed to grow the next crop.”
“Zimbabwe has blocked the majority of mobile money transactions and suspended the country’s stock exchange as it seeks to stabilise its currency.
“The move prompted outcry, with merchants unable to honour any transactions…”
“The longtime director of Lebanon’s finance ministry, Alain Bifani, has resigned citing “forces of darkness and injustice” working to sabotage a sustainable recovery from the country’s deep financial crisis, which he says could potentially impoverish millions.”
“Syria faces the risk of mass starvation or another mass exodus unless more aid money is made available, the head of the UN World Food Programme has said… David Beasley told the BBC a million Syrians were severely food insecure and some were already dying.
“The war-torn country’s currency has collapsed and food prices have soared.”
“Despite reportedly being one of the strictest in the world, India’s lockdown has failed to break the infection chain.
“Undermining it was the migrant crisis – workers from largely unorganised sectors in big cities moving back to their native states, many of whom reportedly died during the journey whilst survivors carried the disease back to their home towns and villages.”
“Nepali housewife Shiba Kala Limbu grimaced as she recalled how she went hungry in order to feed her five-year-old daughter after the coronavirus pandemic cost her husband his job as a mason in the Gulf state of Qatar.
“The 25-year-old said she had no money for rent after the payments from her husband, Ram Kumar, stopped.”
“Even though the author sees no imminent collapse [the book was written pre-pandemic], Orlik also predicts that a famous line by economist Rudi Dornbusch will one day prove to be true in China:
““Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine.””
“Japan’s industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis and the jobless rate hit a three-year high, underscoring the broad economic pain caused by the coronavirus.
“Japan, the world’s third-largest economy is bracing for its worst postwar recession…”
“Major sovereign bond yields, which have been low for years, are expected to be close to current levels for the next 12 months, as the global economy struggles to recover from the impact of COVID-19, a Reuters poll found.
“With expectations for weak economic growth intensifying, major central banks are likely to expand their bloated balance sheets, increasing their sway over bond markets.”
“The worst could be still to come in the Covid-19 pandemic, the World Health Organization (WHO) has warned, six months on from when the outbreak began.
“WHO head Tedros Adhanom Ghebreyesus said the virus would infect many more people if governments did not start to implement the right policies.”
“The world is likely to feel the impacts of the unprecedented post-lockdown recession for years to come, according to a senior investment analyst.
“As the US – the world’s largest economy by nominal GDP – continues to grapple with its outbreak of the SARS-CoV-2 coronavirus, flailing international economies will struggle to recover, says Milford Asset Management senior analyst Frances Sweetman.”
“Nouriel Roubini: ‘My prediction for a Great Depression is not about 2020, but the decade of the 2020s’.”
“A new strain of swine flu which has the potential to spread to humans and cause another pandemic has been identified by researchers in China.
“Named G4 EA H1N1, the virus is similar to the swine flu that caused a pandemic in 2009 and possesses “all the essential hallmarks of a candidate pandemic virus”, according to the authors of the study.”