Big banks expect the coronavirus recession to cut a wide swath through corporate America… Investment-banking revenue soared in the second quarter. But the gains didn’t come from advising CEOs on deals; rather, banks raked in fees helping companies stockpile cash to ride out the downturn.“
““Everybody is, bluntly, struggling,” Bill Demchak, chief executive officer of PNC Financial Services Group PNC Inc., said on an earnings call Wednesday.
“Banks have unrivaled visibility into the health of the U.S. consumers and businesses. They guard deposits, engineer mergers and lend money. They see how much is going into customer accounts, how much is going out and where money is being spent.
“In the second quarter, they saw some alarming things…
Millions of Americans who managed to hold onto their jobs amid the coronavirus pandemic have seen their incomes drop as employers slashed wages and hours to weather what they expected to be a short-term shutdown.“
“Now, with the virus raging and the recession deepening, those cuts that were meant to be temporary could turn permanent — or even pave the way for further layoffs.”
A third (32%) of Americans missed their July housing payments. “
“Banks are setting aside billions to cover potential loan defaults. Twenty-eight million Americans could be evicted in the coming months.”
Jeffrey Tumlin, who leads San Francisco’s $1.3 billion transit system, is in a hard spot…“
““Unless the economy comes ripping right back, and there’s a vaccine, and social distancing is eliminated, we fall off the financial cliff in 2023,” Mr. Tumlin said. “That would result in such severe service cuts that it puts us on what is called the transit death spiral.””
The tea leaves of the world’s biggest bond market are producing a much-more foreboding reading than those of U.S. stock prices. “
“America’s equity indexes are holding well above their pandemic-induced 2020 lows, yet the Treasury market increasingly is foreshadowing doubt over the pace of the economic rebound…”
“During a blue-sky moment in 2018 near the end of a decade-long economic expansion, it was the United States that helped pull the world along as the extra cash from tax cuts and government spending flowed through domestic and global markets.
“But if it was U.S. policy that pushed the world higher then, it is U.S. policy that threatens to pull the world under now…”
European private banks suffered a second successive year of lower profits in 2019 in spite of strong gains across financial markets, leaving the sector in a vulnerable position even before coronavirus struck… “
“One in five of the clients of Europe’s private banks has already moved money to another provider this year…”
Fleets across Europe’s largest markets have delayed cancelled hundreds of thousands of new car orders during the first half of 2020 due to the impact of coronavirus. “
“The fleet sector is down by as much as 50% in some countries, while daily rental has suffered a decline in sales of over 90% in key markets.”
Anti-mask activists gathered in Hyde Park [London, UK] to protest the mandatory wearing of face coverings in shops and supermarkets. “
“Demonstrators at the event in London on Sunday were seen carrying signs that read “no masks” and “I will not be masked, tested, tracked”, in opposition to the UK government’s coronavirus restrictions.”
“UK dividends experienced their biggest quarterly fall on record in Q2, dropping £22bn as the coronavirus forced companies to shore up their balance sheets. A total payout of £16bn was more than 57% below the same period of 2019 as special dividends – formerly a significant source of support – were all but wiped out…”
Almost 40 people were arrested in the heart of Germany’s financial capital Frankfurt after violence broke out during a massive outdoor party near the German city’s concert hall, police said on Sunday. “
“According to dpa, some 3,000 people had been partying at the Opernplatz (Opera Square) on Saturday night.”
Demonstrators have shut a major oil pumping station in southern Tunisia, escalating weeks of protests for jobs and economic development in the deprived region… “
“The demonstration follows weeks of unrest in Tunisia’s south, one of the country’s most marginalised regions, burdened by above-average unemployment, failing infrastructure and an underdeveloped private sector.”
“After aggressive interest-rate reductions to shore up their economies against the havoc wrought by the coronavirus pandemic, central bankers in most sub-Saharan African countries will ask themselves whether the cutting cycle is over when they meet over the next nine days…
““Very few [sub-Saharan African] countries have space to ease monetary policy further, given continued exchange-rate pressures and rising inflation,” said Ayomide Mejabi, chief economist for sub-Saharan Africa at JPMorgan Chase Bank NA…”
Most parts of Lebanon are receiving no more than two or three hours of electricity a day. “
“An incoming flight at Beirut’s airport had to abort a landing this month because the lights on the runway went out. The traffic signals in the capital have stopped working, adding to the congestion on Beirut’s already chaotic streets.”
Twenty-eight Israelis were arrested on Saturday evening as thousands protested in Jerusalem and Tel Aviv against Prime Minister Benjamin Netanyahu and the government’s response to the economic fallout caused by the coronavirus.”“
The Iranian authorities are ramping up repression. They fear mass protests now more than ever… “
“…above all, many Iranians from all walks of life are experiencing unprecedented, crippling economic hardship.”
Around 2,500 Thai protesters on Saturday evening demanded the resignation of the government and the dissolution of parliament… “
“…defying a coronavirus ban on gatherings in one of the largest street demonstrations since a 2014 military coup.”
“Thailand is replacing the top two officials steering the economy through its worst crisis ever, injecting more uncertainty into the policy outlook… The upheaval comes at a time of heightened uncertainty in the global economy and a slump in export- and tourism-reliant Thailand that’s among the worst in Asia.”
“The Kremlin is poised to replace a governor from Russia’s far east charged with multiple murders… potentially kindling a fresh round of anger that has already ignited the largest protests in the region’s history.
“As many as 50,000 people took to the streets on Saturday in Khabarovsk, a city 6,100 miles east of Moscow, to demand the return of Sergei Furgal…”
Long confinements and widespread pessimism in Latin America due to the advance of the coronavirus and the economic debacle have fueled tensions, which in some cases are beginning to turn into protests… “
“…the deterioration of the economic situation… can be decisive, especially in countries where protests and discontent were already on the agenda before the pandemic forced a pause.”
Alberto Fernández, Argentina’s president, has made an impassioned appeal for the world to accept that — with an economy devastated by coronavirus — he cannot budge from his final offer to restructure $65bn of foreign debt.“
“Weighed down by $323bn of borrowing, Argentina was already in a deep recession before the pandemic…”
Some of the world’s largest developing economies are set to face a fiscal crisis in the coming years unless they can roll back huge increases in public spending enacted in response to the Covid-19 pandemic, analysts have warned… “
“They will have to face the choice of risking public unrest by cutting back on spending, or negotiating with investors to restructure their debts.”
Japan’s exports plunged at a double-digit pace for the fourth month in a row in June, backing signs the coronavirus crisis has knocked the economy into its worst postwar recession and raising the spectre of a longer and more painful global downturn…“
“U.S.-bound Japanese shipments nearly halved again due to plummeting demand for cars and autoparts, while exports to China remained weak, pointing to the absence of a strong growth engine for the world economy.”
“With the coronavirus pandemic exacerbating a slowdown in the global economy, governments around the world may have no choice but to increase spending to support businesses and households well into the next year, according to an economist from S&P Global Ratings.”
The economic aftermath of the coronavirus pandemic is likely to worsen when authorities start rolling back relief measures — and banks could experience “far more damage” to their balance sheets, “
“…said Piyush Gupta, group chief executive of Singaporean bank DBS.”
Global public debt is now the highest in recorded history… central bankers could ignite another financial crisis when the combination of unsustainable debt levels and swollen bubbles in equity markets collide…”“
Global growth prospects are deteriorating. Instead of a V-shaped recovery in the 2nd quarter, advanced economies will face historical carnage and a prolonged contraction.“
“But there’s still worse ahead.” [Worse even than this article acknowledges. The global economy cannot function in a state of protracted de-growth – it becomes chaotic and falls apart].
You can read the previous ‘Economic’ thread here and visit my Patreon page here.
“Worse even than this article acknowledges. The global economy cannot function in a state of protracted de-growth – it becomes chaotic and falls apart”
It is so strange to wake up every morning and turn on CNN or equivalent and see headlines that are almost completely normal. We apparently should be worried about Trump’s latest outrage, or whether Johnson can get a Brexit deal (or worse, what the royals or Kardashians did last weekend) rather than the sword of Damocles swinging above our heads.
Maybe, next month all the industries will start up again, and we can all go to an eat-in restaurant to celebrate the V-shaped recovery (and the return of global dimming!). Wont we feel silly then!
Lol, we live in hope! I agree re the cognitive dissonance. I am not brave enough to make any rock solid predictions about what happens next but it seems governments and central banks of prosperous nations have their work cut out if they are going to shield their citizens from the worst of the impending and ongoing pain without evaporating faith in their currencies.
Poorer nations are already up a certain creek without a paddle as far as I can tell, torn as they are between the rising risk of default or enraging their already fractious populaces with swingeing austerity. Eventually the totality fails some way or other and we get a few precious moments of all looking at each other and wondering wtf we were thinking with all of that Kardashian, Brexit stuff before it all gets very messy indeed.
All of humanity has become Wile E. Coyote just before he looks down. 🙂