Credit Crisis Looms The economic damage wrought by politicians’ responses to the virus pandemic is feeding a debt crisis in emerging nations. Ecuador, dependent on oil exports, has asked creditors to restructure its debts. Zambia, among Africa’s biggest copper producers, has delayed payments on its eurobonds and Chinese loans, sinking bond values. Argentina has postponed...
Category: TRENDS ON THE U.S. ECONOMIC FRONT
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EUROPEAN ECONOMIES: DOUBLE DIGITS DOWN
The economies of Austria, France, Germany, Italy, Spain, Switzerland, and the UK will contract by more than 10 percent if Europe’s economic shutdown lasts two months or longer, according to a new study by the ifo Institute. Austria’s losses over two months of the shutdown are figured at €34 to €57 billion and a loss...
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AUTOMOBILE BLUES
AUTOMOBILE BLUES At least one million of Europe’s auto industry workers have been laid off or are working reduced hours, and the industry has lost production of about 1.2 million vehicles since the economic crisis began, according to ACEA, a European auto industry trade group. More than half of affected workers are in Germany, where...
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FED OPENS DOORS TO FOREIGN BANKS
The U.S. Federal Reserve is opening a “temporary lending facility” that will allow foreign banks to convert their U.S. treasury securities into dollars. The new service complements other Fed programs that lend dollars to 14 other central banks to ensure that other economies don’t run out of greenbacks. The strong dollar has been a sanctuary...
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U.S. MARKET
Stock markets ended their worst quarter since the 2008 onset of the Great Recession, with sell-offs so massive that “circuit breakers” were tripped several times to prevent automated selling that could have set off a market crash. The Dow Jones Industrial Average lost 23 percent during 2020’s first three months, its worst quarter since the...
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ECONOMIC HITS AND MISSES
On the real estate front, buying a house typically involves a good deal of personal contact, from viewing the home to making appraisals and inspections to sitting around a table signing documents at a closing. Now, with most of the country in lockdown and stay-at-home orders blanketing the nation, much of that activity has halted....
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SOCIALISM FOR RICHEST, CAPITALISM FOR WORKING CLASS
Citigroup, ranked as the U.S.’s fifth largest bank by assets, has been selected by the U.S. treasury to channel billions of dollars in rescue funds from the government to small businesses and is “working around the clock,” according to CEO Michael Corbat, to make sure everything goes smoothly. Citigroup knows how to get money out...
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POLITICAL PANIC THROWS MILLIONS OUT OF WORK
About 9.9 million American workers lost their jobs during the last two weeks of March, the fastest, broadest collapse of the U.S. jobs market in history. The week ending 27 March recorded 6.6 million new claims for jobless benefits, far outstripping Morgan Stanley’s estimate of 4.45 million, Moody Analytics’ guess of 4.5 million, and Goldman...
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U.S. RELIEF PLAN: THE MISSING $500 BILLION
The dollar amounts of aid in various categories of the U.S. economic rescue plan total about $1.65 trillion, not the $2.2 trillion as advertised. The balance is expected to come from a “multiplier effect,” by which the $1.65 trillion in federal money generates an additional $500 billion in economic activity. Their comic book theory: federal...
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INVESTORS: GOLD IS GOLDEN
The last three weeks’ demand for gold coins and bullion has left dealers’ shelves bare and overwhelmed the supply line. As stock markets tanked a month ago, investors dumped stocks and stored their money in gold. Prices for coins, bullion, stocks, and futures contracts floated above the markets’ turmoil, with gold’s spot price marking a...