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  • Daily Digest

    Daily Digest 8/14 – Recession Fears Spike to 2011 High, More Americans Falling Behind On Debt Payments

    by Daily Digest

    Wednesday, August 14, 2019, 4:47 AM

Economy

Zimbabwe after Mugabe: The country where pensions have disappeared (Saxplayer00o1)

He is 85, and served one company for 46 years as a cleaner, eventually rising to become a receptionist. Vesta says that increasing inflation has robbed them both of a comfortable retirement. A year ago Teddie’s monthly pension was worth $80 (£66), it’s now worth $10.

Nearly 40% Of Education Spending Consumed By Pension Costs (Saxplayer00o1)

Since 2010 alone, spending on educators’ pensions more than doubled, jumping to over $5 billion from less than $2.5 billion. Classroom spending, meanwhile, grew modestly to $8.8 billion from $8.5 billion.

New York health insurance premiums will grow in 2020 (Saxplayer00o1)

Health insurance premiums will rise approximately 6.8 percent next year for individuals and 7.9 percent for employers who purchase coverage on New York’s state-run health exchange.

More Americans are falling behind on their debt payments (Saxplayer00o1)

Bankruptcies are on the rise as American pile up more and more debt. Household debt is near $14 trillion, which is $1 trillion more than it was during the 2008 great recession peak. Samuel Gerdano, the Executive Director of the American Bankruptcy Institute joins Yahoo Finance’s On The Move to discuss.

Demand for junk bonds grows, and so do liquidity worries (Saxplayer00o1)

Over 1.1 billion euros flowed into euro-denominated high-yield debt funds in June, data from Refinitiv showed, taking total assets to a 53.7 billion, the highest for nearly two years and a sliver away from an all-time high.

Why Gold Prices Are About To Skyrocket Even Higher (Saxplayer00o1)

“Government’s around the world are becoming increasingly wary of the dollar’s hegemony in international trade,” says Moore. “And they’re doing their best to distance themselves from it by using their gold reserves to buy more gold instead.”

Central bank rate cuts are inflating a cheap money bubble (Saxplayer00o1)

There is no market history that supports stock market capitalizations above 145% of GDP for an extended period of time. There is also no history that suggests unemployment can stay this low (near a 50-year low) for an extended period of time. And there certainly is no history that suggests that both can be maintained for an extended period of time concurrently.

Recession Fears Spike to 2011 High as Risk of Bubbles Spreads (Saxplayer00o1)

Recession fears are spreading among investors at a time when valuations across major assets are looking dangerously stretched following years of monetary stimulus, the latest Bank of America Corp. survey shows.

Argentina Default Fear Looms as Traders Dump Assets (Saxplayer00o1)

In the wake of President Mauricio Macri’s stunning rout in primary elections over the weekend, investors dumped its stocks, bonds and currency en masse in a selloff that left much of Wall Street wondering whether the crisis-prone country was headed for yet another default.

Negative bond yields are not reflecting economic reality, Fitch warns (Saxplayer00o1)

Fitch said Tuesday that there are now nine countries issuing 10-year bonds at prices that would return a negative yield to maturity of the bond. The ratings agency warned, however, that capital piling into a country’s issued debt didn’t necessarily reflect the stability of that economy.

Bonds Meet the Four Criteria for Defining a Bubble (Saxplayer00o1)

Even without taking into account the extraordinary negative rates in Germany and other leading European countries, these look like bubble valuations, rather than the prices that happen at the top of the cycle. Beyond that, Watling argues perfectly convincingly that the concept of negative yields is inconsistent with how a financial system should work

Tesla Pickup Truck: Everything We Know, Including Price, Range & More (Thomas R.)

“We don’t want it to be really expensive. I think its got to start at less than $50,000 – it’s got to be like $49,000 starting price max. Ideally less. It just can’t be unaffordable. It’s got to be something that’s affordable. There will be versions of the truck that will be more expensive, but you’ve got to be able to get a really great truck for $49,000 or less.”

Heat Wave Pushes Texas Power Demand To Record-High (Michael S.)

Last month, the Houston Chronicle’s Bernard L. Weinstein questioned ERCOT’s ability to keep the air conditioners running in August in light of the fact that a third of the state’s power comes from wind farms. Weinstein also noted the small reserve margin, noting “Should several large power plants go offline for maintenance or a broken gas line, we will likely see brownouts or blackouts.”

Gold & Silver

Click to read the PM Daily Market Commentary: 8/13/19

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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7 Comments

  • Wed, Aug 14, 2019 - 6:50am

    #1

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    3+

    US 30-year bond yield falls to record low, threatens to break below 2%

    China July Industrial Output Growth Weakens to 17-Year Low

    China posted the weakest industrial output growth since 2002 and slumping retail sales in July, as a cyclical slowdown and trade tensions add to the case to roll out more

    Greenspan Sees No Barriers to Prevent Negative Treasury Yields

    Bank of Japan now more likely to ease further, economists say: Reuters poll

    German Economy Contracted in 2Q Under Trade War Pressure

    Going negative? As trade war rages, central banks ponder radical steps

    US 30-year bond yield falls to record low, threatens to break below 2%

     

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  • Wed, Aug 14, 2019 - 7:11am

    #2

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    1+

    Recession news search headlines

    Search Results

    CNN
    5 of the world’s biggest economies are at risk of recession
    “The bottom line is that the German economy is teetering on the edge of recession,” said Andrew Kenningham, chief Europe economist at Capital Economics.
    2 hours ago
    Fox Business
    Recession indicator with perfect track record flashing red
    “Historically, the 2-10 has had better predictive ability of recession than equities,” Sri Kumar, president of the Santa Monica, California-based Sri-Kumar Global …
    20 hours ago
    The Week Magazine (blog)
    How a Trump recession could cement Biden’s 2020 victory
    Thanks to a recession that started the year before, popular incumbent George H. W. Bush was made vulnerable to a challenge from a younger, fresher …
    Blog · 3 hours ago
    SFGate
    U.S.-China trade war increases recession likelihood, analysts say
    Some are now downgrading their projections for economic growth at home as a result and even raising their projections for the likelihood of a recession.
    21 hours ago
    Reuters
    Predicting the next US recession
    The recent rise in U.S.-China trade war tensions has brought forward the next U.S. recession, according to a majority of economists polled by Reuters who now …
    22 hours ago
    The New York Times
    Germany Is Heading Toward Recession, New Data Indicates
    FRANKFURT — In an ominous indicator of the damage inflicted by trade war, data released Wednesday indicated that the German economy is hurtling toward …
    1 hour ago
    CNBC
    Bond markets are sending one big global recession warning
    The U.S. bond market just flashed what could be its biggest warning yet of a coming recession, and it is not alone. The spread between the 2-year Treasury yield …
    19 mins ago
    Business Insider
    Recession fears just hit an 8-year high for the biggest investors on Wall Street
    The percentage of large fund managers expecting a recession in the next 12 months just hit an eight-year high, relative to those who think one is unlikely, …
    23 hours ago
    Reuters
    Shrinking German economy ‘on edge of recession’ as exports stutter
    BERLIN (Reuters) – Slumping exports sent Germany’s economy into reverse in the second quarter, with prospects of an early recovery slim as its manufacturers …
    7 hours ago
    Wall Street Journal
    As Global Order Crumbles, Risks of Recession Grow
    Investors believe central banks—the last bastion of the technocratic, globalized elite—can use their limited ammunition to stave off recession. Yet central banks …
    2 hours ago

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  • Wed, Aug 14, 2019 - 11:15am

    #3

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    Bonds with negative yields at close to $16 Trillion

    Fed is failing, says Trump, as global rates tumble

    Grant, the chief global strategist at B. Riley FBR, said Wednesday on “Varney & Co.” that rates of U.S. Treasuries could fall below zero.

    “I think it’s possible,” Grant said. “It certainly looks to me like, because of what the central banks have done in the rest of the world – meaning in one week’s time we went from negative yields to $15.1 trillion [in debt], we’re now at $15.9 trillion [in debt] and the Fed has got to respond to this … there’s just no choice.”

    CNBC

    Bonds haven’t been this popular since the financial crisis as recession feararch Resultss rise

    Even amid $15.9 trillion worth of negative-yielding bonds globally, investors continue to flock to the space as the U.S.-China trade war …

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  • Wed, Aug 14, 2019 - 5:52pm

    #4

    Michael_Rudmin

    Status Gold Member (Offline)

    Joined: Jun 25 2014

    Posts: 866

    2+

    Chase Manhattan wiping Canadian credit card debt

    https://twocents.lifehacker.com/why-chase-wiped-out-debt-for-canadian-cardholders-1837214496

    Really strange.  Stranger, the person who told me this said it was getting ready to happen worldwide.

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  • Wed, Aug 14, 2019 - 6:40pm

    #5

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    U.S. 30 Year Treasury Bond yield drops to under 2%

    U.S. 30 Year Treasury Bond

    Last Updated: Aug 14, 2019 9:38 p.m. EDT

    %1.996

     -0.024
    PREVIOUS CLOSE
    2.02%

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  • Wed, Aug 14, 2019 - 6:45pm

    #6

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    Negative-Yielding Debt Hits Record $16 Trillion on Curve Fright

    Negative-Yielding Debt Hits Record $16 Trillion on Curve Fright

    By Cormac Mullen
    August 14, 2019, 5:32 PM PDT
    The recession alarm bell ringing in U.S. government bond markets sent investors rushing once more to haven assets, pushing the world’s stockpile of negative-yielding bonds to another record.

    The market value of the Bloomberg Barclays Global Negative Yielding Debt Index closed at $16 trillion Wednesday after the key U.S. 2-year and 10-year yield curve inverted for the first time 2007 — a move often considered a harbinger of an economic downturn.

     

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  • Thu, Aug 15, 2019 - 7:14am

    #7

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2955

    Are Bonds So Expensive That You Buy Gold? Hedge Funds Think So

    Are Bonds So Expensive That You Buy Gold? Hedge Funds Think So

    Hedge funds are turning to gold for refuge as the world’s stockpile of negative-yielding debt grows bigger by the day.

    Euro zone bank share meltdown brings prices to brink of 1980s

    Negative interest rates, toppling bond yields, greater regulation and rising recession signals have wiped out most of the value of European banks, with their shares now at meltdown prices approaching the days of the Berlin Wall.

    Sweden sells 10-year debt with negative yield for first time

    Central banks float idea of going negative

    In Asia, central banks in economies as diverse as Australia, India and Thailand have stunned markets by aggressively cutting rates in response to the broadening fallout from the U.S.-China trade war.

    Banks Announced Almost 50,000 Job Cuts This Year, Led by Europe

    When the End of the Earth Isn’t Far Enough to Escape the World

    Ghost of Crisis Past Haunts European Markets
    Investors may see little danger of the euro zone breaking up anytime soon, but a growing pile of poor economic data is souring sentiment to a degree not seen since the painful days of the region’s sovereign debt crisis.

    Yield Inversion Is Coming to Asia as Growth Woes Spread
    The inverted yield curve looks set to be a global phenomenon, with major Asian debt markets primed to mirror the moves in Treasuries as fears grow that the world economy is teetering on the brink of a recession.

    German downturn piles on pressure to relax fiscal rules
    The German government’s seemingly cast-iron commitment to balanced budgets came under renewed pressure on Wednesday, after news that Europe’s largest economy shrank in the second quarter triggered a fresh round of appeals for Berlin to ramp up spending.

    Central Banks Risk a Race to the Bottom by Cutting Rates in Unison
    More than 30 central banks around the world have cut interest rates this year, as countries move to shore up their economies amid rising concerns over global growth, trade conflicts and the threat of a messy Brexit.

    Canada’s yield curve inversion turns up pressure on central bank to cut rates
    Inversion of Canada’s yield curve by the most in nearly two decades is threatening to coerce the Bank of Canada to cut interest rates rather than risk an economic downturn, portfolio managers said on Wednesday.

    Economist El-Erian: Fed now has no choice but to cut rates or risk disrupting markets

    Bond yields are tumbling throughout Asia Pacific
    In Japan, Australia, South Korea, Hong Kong and Singapore, yields on 10-year government bonds have been dropping sharply.
    Recession fears have sent investors pouring into the assets.

     

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