Generational Dynamics World View - Printable Version +- Generational Theory Forum: The Fourth Turning Forum: A message board discussing generations and the Strauss Howe generational theory (http://generational-theory.com/forum) +-- Forum: Fourth Turning Forums (http://generational-theory.com/forum/forum-1.html) +--- Forum: Theories Of History (http://generational-theory.com/forum/forum-7.html) +--- Thread: Generational Dynamics World View (/thread-51.html) Pages:
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RE: Generational Dynamics World View - John J. Xenakis - 02-28-2020 ** 28-Feb-2020 World View: Collapse of interconnected, interlocking debt richard5za Wrote:> It may well be forced selling; it depends upon just how reckless (02-28-2020, 12:25 AM)Warren Dew Wrote: > I don't see how covering shorts can cause a crash, even selling to A chain reaction panic would not be caused by recent reckless transactions or recent shorts. It would be caused by the unraveling of hundreds of trillions of dollars of interlocking debt that has been built up since the end of World War II, and people increasingly ignored the lessons of the Great Depression.
That graph is a year old. Global debt has continued to increase exponentially, and had reached $253 trillion by September, and is probably around $260 trillion today. -- Global debt hits new record of $253 trillion and is set to grow even more this year https://www.cnbc.com/2020/01/14/global-debt-hits-all-time-high-of-nearly-253-dollars--iif-says.html (CNBC, 14-Jan-2020) This debt has been growing exponentially for decades. In addition, the number of interlocking connections has been growing exponentially. (This is analogous to the interlocking, interconnected global supply chains through China that are much in the news these days.) So the chain reaction panic would be triggered by a major bankruptcy in one company, which won't then be able to make payments on their debts, and will sell off their assets, including stocks. Other companies or hedge funds that counted on receiving those debt payments would then be forced to sell stocks to pay their own debts, to cover shorts, or meet margin calls. The point is that this has nothing to do with recent transactions. This has to do with an ocean of interlocking, interconnected debt that has built up since WW II. In 1929, it took for years for the interconnected debt to unravel completely, and the market only reached bottom in 1933. In 1987, ther was a "false panic" that fizzled quickly because there was still a reasonable amount of interconnected debt. In 2008, I wrote a lot about this interconnected debt situation, especially after Bear Stearns and Lehman went backrupt. Normally, the ocean of interlocking, interconnected debt is self-healing, but in 2008 it wasn't. ** Investors fear a 'chain reaction' in stock market. ** http://www.generationaldynamics.com/pg/xct.gd.e080317b.htm#e080317b ** Investors are having another nail-biting weekend as Lehman heads off the cliff ** http://www.generationaldynamics.com/pg/xct.gd.e080913.htm#e080913 The thing that I didn't understand in 2008 is that the Fed could "print money" in massive amounts using quantitative easing. The purpose of QE was specifically to allow people to borrow more money instead of being forced to sell off. So today we're facing the same situation we faced in 2008, but with some differences. If you look at the IMF graph, it seems that debt in the US has leveled off (at an extremely high), but has grown much faster outside the United States. If a new panic begins, the Fed and other central banks would try to "print money" to patch things up, but with $260 trillion in global debt, that may not be possible. Ordinarily I wouldn't be talking like this, but the world economy is extremely fragile today because of the US-China trade talks, and especially because of the world coronavirus crisis, which has already resulted in millions of businesses in China going bankrupt. These factors are an enormous shock to the body of interlocking, interconnective debt that I described. If we follow the same pattern as in 1929, then investors will spend the weekend becoming increasingly worried, and be ready to sell first thing Monday morning, resulting in a massive Black Monday selloff. RE: Generational Dynamics World View - John J. Xenakis - 03-01-2020 *** 2-Mar-20 World View -- Coronavirus updates -- infections spread across the world This morning's key headlines from GenerationalDynamics.com
**** **** Coronavirus updates -- infections spread across the world **** Medical staff with the coffin containing the body of Assunta Pastore, 87, who died at the Garden hotel in Laigueglia, north-west Italy, on Sunday. (AP) On Sunday, the United States, Australia and Thailand reported first deaths from coronavirus, while the Italy death toll rose to 34, and Dominican Republic reported its first case. **** **** Wuhan Coronavirus (Covid-19) observations **** It's now the first week of March, and the shape of the coronavirus crisis is becoming clearer. I've read or listened to literally hundreds of reports, and these are my personal conclusions:
General advice from the experts: Wash your hands, cough into your sleeve, and don't touch your face. Source: Related Article: KEYS: Generational Dynamics, China, Wuhan Coronavirus, Covid-19, Singapore, Japan, Summer Olympics, South Korea Permanent web link to this article Receive daily World View columns by e-mail Contribute to Generational Dynamics via PayPal John J. Xenakis 100 Memorial Drive Apt 8-13A Cambridge, MA 02142 Phone: 617-864-0010 E-mail: john@GenerationalDynamics.com Web site: http://www.GenerationalDynamics.com Forum: http://www.gdxforum.com/forum Subscribe to World View: http://generationaldynamics.com/subscribe RE: Generational Dynamics World View - John J. Xenakis - 03-02-2020 ** 02-Mar-2020 World View: WHO: This virus is not influenza I'm getting really annoyed by seeing smooth-talking males and sweetly smiling sexy girls explaining to the TV audience that there is nothing to worry about because hundreds of thousands of people get the ordinary seasonal flu each other, and 50,000 or so die each year. Therefore, they conclude, coronavirus is no different than ordinary flu. That's obviously an open-mouth lie.
Director-General Tedros Adhanom Ghebreyesus gave a press briefing today: Quote: "The epidemics in the Republic of Korea, Italy, Iran So if you ignore the pretty smiles and soothing, reassuring words, then that's where we really are. ---- Source: -- WHO says new coronavirus cases outside China are 9 times higher than inside over last 24 hours https://www.cnbc.com/2020/03/02/who-says-9-times-more-coronavirus-cases-outside-china-than-inside-in-last-24-hours.html (CNBC, 2-Mar-2020) ---- Related: ** 2-Mar-20 World View -- Coronavirus updates -- infections spread across the world ** http://www.generationaldynamics.com/pg/xct.gd.e200302.htm#e200302 RE: Generational Dynamics World View - Warren Dew - 03-03-2020 (03-02-2020, 06:44 PM)John J. Xenakis Wrote: Because China is an authoritarian country, and the rulers have more scope to overreact. As for the millions of businesses shut down, that's a result of the governmental overreaction. Did you suddenly believe that the Chinese Communist Party had somehow become sensible and rational just for this one occasion? Quote: Because Japan would prefer to quarantine all cruise ships that way even for ordinary flu, in order to minimize any potential impact on their own population; they just can't do it for ordinary flu for political reasons. In fact, if it weren't for political realities, the Japanese would prefer to prohibit any foreigner from ever setting foot in Japan. They certainly don't care about nonjapanese getting sick on the cruise ship, and they care more about the Japanese that stay home than about those that travel on some foreign cruise ship. Quote: Because when the public gets worried about something, governments prefer to be seen as "doing something", even if it turns out what they're doing is counterproductive. In the context of the current crisis period, there's also the fact that the population is xenophobic so any actions that exclude foreigners are likely to be seen positively. Incidentally, CDC numbers imply that in 6-8% of flu hospitalizations this winter, the patient has died. In previous years, it has ranged up to 25% based on figures at WebMD. It would be interesting to know how many of the "confirmed" Covid-19 cases have involved hospitalization - I suspect a high fraction, since the bar for getting tested has been pretty high - so that we could get some apples to apples comparisons of fatality rates between seasonal flu and Covid-19. I suspect we'd find the fatality rates are in the same range, and that Covid-19 may even be lower. https://www.cdc.gov/flu/about/burden/preliminary-in-season-estimates.htm RE: Generational Dynamics World View - John J. Xenakis - 03-03-2020 ** 03-Mar-2020 World View: WHO changes coronavirus (Covid-19) fatality rate to 3.4% Tedros Adhanom Ghebreyesus, director of the World Health Organization (WHO), shocked reporters a couple of hours ago by saying that about 3.4% of confirmed coronavirus cases have died. This is contrasted to the 0.1% death rate of the ordinary seasonal flu. At the beginning of this crisis, I heard numbers like 2.1%. Then, after a couple of weeks, the WHO announced that it was actually about 1%. So today's announcement by Tedros is actually quite shocking. If correct, it will mean additional tens of millions of deaths from Covid-19 in the next year. Other than that, the news is that coronavirus continues to spread, and shows no signs of stopping. Financial markets continue to be in a chaotic near-panic state. ---- Source: -- Coronavirus more deadly than flu but containable: WHO's Tedros https://www.reuters.com/article/us-coronavirus-health-who/coronavirus-more-deadly-than-flu-but-containable-whos-tedros-idUSKBN20Q2G6 (Reuters, 3-Mar-2020) RE: Generational Dynamics World View - John J. Xenakis - 03-05-2020 ** 05-Mar-2020 World View: Latest Coronavirus updates Several days ago I described the latest updates in the Wuhan Coronavirus (Covid-19) emergency. The following repeats that list, with some updates and further context. These are my personal conclusions, based on the thousands of reports that I've heard or read. My main conclusion is that the base scenario is that economic growth will remain essentially at zero, and there will be no recovery until a vaccine is developed, which experts say will not happen until 2021. This is the predicted scenario assumed by this article. The details of the predicted recovery are at the end of this article.
My base scenario for the unfolding of the coronavirus crisis is as follows:
The recovery could be sped up if a vaccine could be deployed more quickly, but experts insist that this is impossible. On the other hand, the recovery could be derailed for years if the current stock market bubble bursts and there's a major international financial crisis, which history tells us is overdue. The recovery could also be derailed by war. China's economy is extremely unstable, and Mideast ethnic rivalries are churning up, and either of these situations could spiral into a larger war -- which history tells us is also overdue. All in all, it will take about a year for the world to return to "normal," but that will be a "new normal," living side-by-side with Coronavirus. However, WW III and a global financial crisis may well begin within a year. By 2021, the world will be a very different place. General advice from the experts: Wash your hands, cough into your sleeve, and don't touch your face. RE: Generational Dynamics World View - Warren Dew - 03-05-2020 (03-05-2020, 08:23 PM)John J. Xenakis Wrote: Singapore has had no deaths, though, compared to countries that get winter like Japan and Korea. Possibly the best policy would be to hold it off as much as we can until May, then try to get everyone to get it and recover by September. RE: Generational Dynamics World View - Ragnarök_62 - 03-05-2020 (02-28-2020, 12:25 AM)Warren Dew Wrote:(02-27-2020, 10:17 PM)John J. Xenakis Wrote: If we follow the same pattern as in 1929, then Monday will be a I don't think there are too many shot positions out there. The FED scared a lot of them off with CTRL-P. So there aren't as many short cover buy actions. I did like those awful cheap out of the money S&P puts which the FED made dirt cheap with their constant market rah rahs. John is correct, it was a matter of time before the everything bubble found its pin. I bet on the black swan event as being a lot worse than our hopium addled nation realizes. RE: Generational Dynamics World View - John J. Xenakis - 03-05-2020 *** 6-Mar-20 World View -- Turkey's Erdogan travels to Moscow to beg Russia's Putin for Idlib ceasefire deal This morning's key headlines from GenerationalDynamics.com
**** **** Turkey's Erdogan travels to Moscow to beg Russia's Putin for Idlib ceasefire deal **** Recep Tayyip Erdogan and Vladimir Putin in Moscow on Thursday. Erdogan is the lamb being led to slaughter. Turkey's president Recep Tayyip Erdogan traveled to Moscow today to meet with Russia's president Vladimir Putin. At the end of their meeting, they announced a ceasefire agreement for Syria's Idlib province. Before going into the terms of the agreement, let's take a look at what each of the protagonists wants. I heard a video clip from Syria's president Bashar al-Assad on tv. I don't have the exact words, but it was something like the following: <QUOTE>"Why does Turkey have troops in Idlib? Syria has never done anything to Turkey. Turkey should withdraw its troops from Idlib. They have no business being in Syria." (paraphrase) <END QUOTE> This statement made me laugh because it's so completely honest and so completely typical of al-Assad's sociopathic, murderous, bloody personality. Al-Assad has repeatedly made it clear that he wants to take full control of Idlib province and get rid of the 4 million Sunni Arabs living there, most of whom are children, and most of the rest of whom are women. Al-Assad would like to push all four million of them into Turkey, which would require Turkey to open its border to them, which would be an economic disaster for Turkey -- and for Europe as well, because they would continue traveling to the EU. Or else, al-Assad would simply like to kill all four million Sunni Arabs. When al-Assad says that Turkey should not interfere, he means that he wants a free hand to slaughter all four million of them, by any means possible, leaving their dead bodies strewn across Idlib, to have their bodies and belongings to be picked over by those lucky Syrian troops. And he's telling Turkey to just sit there and watch all this go on. None of this is really surprising. Al-Assad has said for years that he wants control of Idlib and the removal of all the Syrian Arabs, all of whom he considers to be cockroaches to be extinguished. **** **** Putin's objectives in Syria **** Vladimir Putin is the most dishonest of the participants in that everything he says is a lie. So we can only infer his objectives:
**** **** Erdogan's objectives in Syria **** Turkey is facing an existential crisis, with four million Syrian civilians crowded along its border. If al-Assad is allowed to kill four million civilians, it will be a social and political disaster for Turkey for not stopping it. If al-Assad is allowed to drive four million civilians into Turkey, that would be an economic disaster for Turkey. So that's Erdogan's major objective in meeting with Putin: Please, please, please stop al-Assad's attack on the four million civilians in Idlib. Last week, Russian and Syrian warplanes killed 30-50 Turkish soldiers in Idlib who were there as observers. This left Erdogan with no choice. Turkey has now sent thousands of troops into Idlib to repel the Syrian regime army. On Tuesday, there was a fistfight in Turkey's parliament between Erdogan supporters and opponents. According to one report, the disagreement was whether Erdogan should be sending troops into Syria. According to another report, the disagreement was whether Erdogan should be meeting with Putin, since it was Putin's warplanes that killed the Turkish soldiers in Idlib. So on Thursday Erdogan and Putin did agree to a temporary ceasefire. But anyone can see that this ceasefire agreement is a joke. Al-Assad is bloodthirsty, and won't stop killing civilians in Idlib. Russia sees support for Syria as being the way to be recognized as a powerful player in the Mideast. There are powerful generational forces at play here. Nothing is going to deter al-Assad for long. Nothing will stop Putin from fully supporting al-Assad. In my personal opinion, Erdogan will be forced to full-scale war with the Syrian regime army. That would lead to war between Turkey and Russia. Turkey and Russia have both made it clear that neither wants war with the other, and yet they've fought major many generational crisis wars with each other. ( "25-Nov-15 World View -- Turkey shoots down Russian warplane, evoking memories of many Crimean wars" ) There are various "compromise" agreements being discussed. These compromises have to do with setting up buffer zones or ceasefire zones, where Idlib civilians can hide out from Syrian and Russian warplanes. We've had "de-escalation" zones before, but they're always a hoax, since Putin uses them to cover up Russian atrocities, and al-Assad simply ignores them. **** **** European Union reaction to Idlib crisis **** Erdogan has been begging European Union officials to provide help with the potential humanitarian crisis in Idlib. In order to pressure the EU, Turkey has encouraged tens of thousands of Syrian refugees to cross the border into Europe. These are not refugees from Idlib. These are from the 3.5 million Syrian refugees that are already in Turkey. Thousands of these migrants and refugees are trapped on Turkey's side of the border with Greece and Bulgaria. Along the Edirne river, which serves as a border between Greece and Turkey, there have been clashes between the migrants and Greek police. Turkey has accused Greece of using live ammunition against the migrants, a charge that Greece has denied. On Thursday, Turkey deployed 1,000 police officers on its border with Greece. Formerly, these police were used to prevent migrants from trying to cross into Greece. But now they have a different purpose: Their job is to stop the Greek police from pushing the migrants back into Turkey. All this is on top of millennia of wars between Greece and Turkey, dating back at least to the days of the Trojan Horse, culminating most recently in the conflict over Cyprus. So Turkey is facing a new conflict with the EU, is close to war with the Syrian regime in Idlib, and that may expand to war with Russia. In this generational Crisis era, there are powerful generational forces pushing these conflicts and potential conflicts forward. It's hard to see what might stop them, if anything can. Sources:
Related Articles:
KEYS: Generational Dynamics, Syria, Bashar al-Assad, Idlib, Turkey, Recep Tayyip Erdogan, Russia, Vladimir Putin, Tartus naval base, Hmeimim airbase, Nato, Bulgaria, Greece, Edirne river, Cyprus Permanent web link to this article Receive daily World View columns by e-mail Contribute to Generational Dynamics via PayPal John J. Xenakis 100 Memorial Drive Apt 8-13A Cambridge, MA 02142 Phone: 617-864-0010 E-mail: john@GenerationalDynamics.com Web site: http://www.GenerationalDynamics.com Forum: http://www.gdxforum.com/forum Subscribe to World View: http://generationaldynamics.com/subscribe RE: Generational Dynamics World View - John J. Xenakis - 03-06-2020 ** 06-Mar-2020 World View: Vitamin C and the Common Cold Navigator Wrote:> Like John, I also use massive quantities of Vitamin C on a daily I have a Vitamin C story similar to yours. The book that I read was "Vitamin C and the Common Cold" by Linus Pauling. Several weeks after reading it, I started developing a bad sore throat. It was 7 pm and I was working at IBM, and everyone else had gone home, so I had the mainframe to myself. I decided that I might as well stay and work as long as possible, since I knew from experience that the next day I would be staying at home sick in bed. So I worked until around 1 am and left. But on the way home, I stopped off at the Philips Drugstore which, at that time, was the only all-night drugstore in Boston. I bought a bottle of Vitamin C, drove home, took five grams of Vitamin C and went to bed. When I work up the next morning, I was truly shocked. I had no sore throat, no sniffles, no nothing. I felt as good as ever. According to the book, when you start feeling the first symptoms of a cold -- the sniffles or a scratchy throat -- then you should immediately take 5 grams of Vitamin C, and continue, taking about 20 grams a day for several days. So I did that, and stopped having colds. Then, around five years later, I decided that it would be easier to prevent even the initial symptoms, by taking 5 grams of Vitamin C every day. I got three colds that year. I remember the secretary where I worked mocking me. "Hahaha. You're taking vitamin C but you got a cold. Hahaha." Well, anyway, I learned my lesson. For Vitamin C to work, at least for me, you have to take very little on a daily basis, but then take massive amounts at the first symptoms. That's worked pretty reliably every since. Quote:> "He pointed out all of the reasons for taking large Yeah, this is Linus Pauling the conspiracy theorist speaking, but I don't buy this. There are very good reasons why the medical field doesn't advocate this -- it's way too complicated. You have to take a lot of vitamin C some days, and very little other days. 99.9% of the people could never cope with that. The FDA wouldn't like this because they simply want to issue a minimum daily requirement. The vitamin manufacturers don't like this because you're not taking vitamin C every day. So this Vitamin C therapy has absolutely no constituency, except for Pauling acolytes. And that's why the medical field doesn't advocate this. Having said that, I've said to many doctors over the years that I take vitamin C for a cold, and they always ask me if it works. When I say that it does, they don't seem surprised. RE: Generational Dynamics World View - John J. Xenakis - 03-06-2020 ** 06-Mar-2020 World View: Singapore deaths (03-05-2020, 09:09 PM)Warren Dew Wrote: > Singapore has had no deaths, though, compared to countries that I'm not sure it makes sense to compare the number of deaths in Singapore to those in South Korea and Japan. Singapore is tiny compared to the other two, and I understand has a very authoritarian government that can isolate people a lot more quickly. However, the core assumption that I'm making has nothing to do with deaths. The core assumption is that, sooner or later, everyone in the world will be exposed to coronavirus. A large number will develop no symptoms, or mild symptoms. But a significant number will become seriously ill and require hospitalization, with many deaths. Even if the rate of infection comes down a little in warm weather (and it's far from clear that it does), it will return in full force in the fall. I was listening to a discussion of vaccines on the BBC today, and an interview with a the head of a company making a new high-tech vaccine that can be deployed more quickly than existing vaccines. It will go through stage 1 and stage 2 tests this year. When can it be deployed? "We hope, early next year." RE: Generational Dynamics World View - John J. Xenakis - 03-06-2020 ** 06-Mar-2020 World View: Flu vaccine FishbellykanakaDude Wrote:> We have a "flu" vaccine too,.. well, not "too", as we don't yet The flu changes every year, so there's a new flu vaccine every year, though work is being done on a "universal" flu vaccine. If the Covid-19 vaccine does not work with Covid-21, then the crisis will continue a lot longer. When a Covid-19 vaccine becomes available, the first thing they'll do is give it to health care givers, since they're on the front lines. A vaccine will make contact tracing a lot more effective. Today, when contact tracing is done for a Covid-19 patient, then the contacts will be isolated or quarantined if they show symptoms, but if there are no symptoms then nothing can be done. But if a vaccine is available, then contact tracing becomes a lot more effective, since the vaccine can be given even to asymptomatic people. The experience of Ebola in eastern DRC is very educational. The Ebola epidemic in west Africa in 2014-16 was disastrous, though it finally burnt itself out. But by 2018 a vaccine was available, and that same vaccine works with the strain of Ebola in eastern DRC. What's amazing about the DRC situation is that it's an active war zone, with ethnic groups attacking and killing each other -- and sometimes attacking and killing medical NGOs -- on a daily basis. But they gave the vaccine to vulnerable people in Uganda, so Ebola hasn't spread there. And they've used the vaccine in conjunction with contact tracing very effectively in eastern DRC, so they've done a great job in preventing it from repeating the 2014-16 disaster. So once a Covid-19 vaccine becomes available, hopefully early next year, the Covid-19 pandemic will be controlled within a few weeks in most developed countries, and within a few months in less developed countries. RE: Generational Dynamics World View - John J. Xenakis - 03-07-2020 ** 07-Mar-2020 World View: Covid-19 Vaccine MrGuest Wrote:> Why are we so confident that there will be a vaccine? From what As you suggest, there are a lot of companies working on a Covid-19 vaccine, but you make a good point: They might all fail. Here are two articles on current developments: These nine companies are working on coronavirus treatments or vaccines — here’s where things stand https://www.marketwatch.com/story/these-nine-companies-are-working-on-coronavirus-treatments-or-vaccines-heres-where-things-stand-2020-03-06 A simple guide to the vaccines and drugs that could fight coronavirus https://www.vox.com/science-and-health/2020/3/4/21154590/coronavirus-vaccine-treatment-covid-19-drug-cure RE: Generational Dynamics World View - Warren Dew - 03-07-2020 (03-06-2020, 05:21 PM)John J. Xenakis Wrote: ** 06-Mar-2020 World View: Singapore deaths More authoritarian than China? China had plenty of deaths. I compared to South Korea and Japan because of similar technology levels, but the truth is South Korea and Japan are a lot more authoritarian than the US, too. Quote:However, the core assumption that I'm making has nothing to do with My argument isn't that the spread will slow in the Summer; Singapore has had cases, too. My argument is that Covid-19 appears to be less deadly in warm weather. The ideal strategy, ignoring vaccines for the moment, would be to try to get everyone exposed and as many infected as possible during the summer, when they won't die. RE: Generational Dynamics World View - Warren Dew - 03-07-2020 (03-07-2020, 08:24 AM)John J. Xenakis Wrote: ** 07-Mar-2020 World View: Covid-19 Vaccine The last coronavirus for which people worked on a vaccine was SARS, which like Covid-19 was a bat origin coronavirus. At least one researcher had a vaccine ready for clinical trials but never got funding because SARS had declined by then. Common colds are the most common coronavirus diseases. The reason vaccines are not typically developed for them is that they mutate even faster than the flu. Just like a flu vaccine one year is typically rendered ineffective by flu mutations by the next year, coronaviruses mutate faster than the vaccines can keep up. However, the whole reason the common cold is less deadly than Covid-19 is because of how mutation works: the common cold has mutated to be less deadly, so that it will be more easily spread. If Covid-19 mutates, it's likely to become less deadly too. Then there's the question about how deadly Covid-19 actually is. Up until recently, we had no idea how many cases were being missed because of minimal or no symptoms. South Korea has started random testing of the general population regardless of symptoms. They're now testing 10,000 people per day, with about 500 new cases found per day. Unfortunately I can't find a breakdown between random tested and nonrandom testing, but if many of the new cases are found by random testing, that suggests that 5% of the South Korean population may currently have Covid-19. That would be 2.5 million people. Compared to 2.5 million people, South Korea's 48 deaths would be less than a 0.002% fatality rate. That might not be much higher than the chances of dying from complications of a common cold. RE: Generational Dynamics World View - John J. Xenakis - 03-07-2020 ** 07-Mar-2020 World View: Lebanon defaults on $1.2 billion loan payment
Months of government chaos and street protests, cause by corrupt politicians, culminated on Saturday with an announcement that Lebanon will default on loan payments scheduled for Monday. The $1.2 billion loan payment is due on a portion of Lebanon's $91 billion debt. Prime Minister Hassan Diab gave a televised speech to the nation, saying the following: Quote: "Today, we are paying the price for the mistakes of Protests began on October 17 of last year, when the government announced tax increases. The street protests have become increasingly violent, with rock throwing and molotov cocktails. The economy has gone from bad to worse. Inflation is soaring, and the banks are restricting people from withdrawing their savings. The country is running out of foreign reserves (dollars). Part of Lebanon's problems is that Iran has had to cut back on aid to Hezbollah, as a result of US sanctions on Iran. Lebanon's government is largely in control of Hezbollah, which is considered in the West to be an international terrorist organization. Because of Hezbollah, and because Lebanon's government has refused to implement much needed structural reforms, Western nations have been reluctant to extend more aid to Lebanon than they already have. The debate in Lebanon is whether they should appeal to the International Monetary Fund (IMF) for debt relief. Hezbollah opposes going to the IMF, since they consider the IMF to be a tool of the United States. Furthermore, the IMF would insist on the structural reform that Lebanon has been avoiding for years, and possibly decades, including raising taxes. As I've described in detail in the past, Lebanon has a "confessional system of government," where power is divided based on sectarian affiliation or confession, with Sunni Muslims, Christians, and Shia Muslims each in total control of one portion of the government. ** 19-Jan-20 World View -- Violence surges in street protests in Lebanon as economy collapses ** http://www.generationaldynamics.com/pg/xct.gd.e200119.htm#e200119 Because each sect has complete control of one portion of the government, there are no checks and balances and corruption is rampant, with the leaders of each sect able to steal as much money as they like from their own part of the government. The three sects have been fighting among themselves to gain as much money and power as possible, leading now to economic default. Next week, Lebanon will go around to the EU, IMF, World Bank, and other organizations, begging for a bailout. However, no bailout will be possible without structural reforms and severe austerity measures, resulting in even larger and more violent street protests. And, of course, it's worth noting in passing that Lebanon is right next door to an ongoing international disaster in Syria's Idlib province, which can blow up in any of several different ways. ** 6-Mar-20 World View -- Turkey's Erdogan travels to Moscow to beg Russia's Putin for Idlib ceasefire deal ** http://www.generationaldynamics.com/pg/xct.gd.e200306.htm#e200306 ---- Sources: -- Why Divided Lebanon Has Left a Decision on Bond Default So Late https://www.bloomberg.com/news/articles/2020-03-06/why-divided-lebanon-has-left-a-decision-on-bond-default-so-late (Bloomberg, 6-Mar-2020) -- Lebanon to default on debt for first time amid financial crisis https://www.theguardian.com/world/2020/mar/07/lebanon-to-default-on-debt-for-first-time-amid-financial-crisis (AFP, 7-Mar-2020) -- Hassan Diab / FACTBOX-Lebanon was living a 'delusion' - excerpts from PM's speech https://www.devdiscourse.com/article/international/926527-factbox-lebanon-was-living-a-delusion---excerpts-from-pms-speech (Reuters, 8-Mar-2020) -- Lebanese leaders oppose paying sovereign debt: Presidency https://www.cnbc.com/2020/03/07/lebanese-leaders-oppose-paying-sovereign-debt-presidency.html (CNBC, 7-Mar-2020) -- Lebanon defaults on its $1.2 bn Eurobond debt, PM says corruption ‘has eaten the state’ https://www.rt.com/business/482578-lebanon-defaults-eurobond-debt-corruption/ (Russia Today, 7-Mar-2020) -- Lebanon to default on debt amid financial unrest https://www.dw.com/en/lebanon-to-default-on-debt-amid-financial-unrest/a-52676967 (Deutsche Welle, 7-Mar-2020) -- Crisis-hit Lebanon to default on $1.2 billion loan payment http://www.therepublic.com/2020/03/07/ml-lebanon-eurobond/ (AP, 7-Mar-2020) RE: Generational Dynamics World View - pbrower2a - 03-07-2020 Obviously a country struggling to meet debt payments is having trouble meeting public expectations. Defaulting on debt may not be the big trouble that defaulting on public obligations is. RE: Generational Dynamics World View - Warren Dew - 03-08-2020 To the contrary, defaulting on the debt implies that they have been spending more than they are taking in, and borrowing to make up the difference. Once they default, they won't be able to borrow any more, and their spending will have to be even more restricted. In addition, some of that debt may be held by their own citizens. RE: Generational Dynamics World View - John J. Xenakis - 03-08-2020 ** 08-Mar-2020 World View: Markets plunging Here are some current market prices, courtesy of Bloomberg TV: dow futures down 985 3.82% s&p futures down 124 4.18% ten year treasury 0.76% Australia asx down 310 4.86% Oil plunging most since gulf war in 1991 Nymex crude 32.84 down 8.44 20.45% Brent crude 26.32 down 8.95 19.77% These figures may be a little out of date, as they seem to keep falling as I'm typing them. RE: Generational Dynamics World View - pbrower2a - 03-08-2020 (03-08-2020, 06:16 PM)John J. Xenakis Wrote: ** 08-Mar-2020 World View: Markets plunging There's more to this meltdown than a respiratory virus. To be sure, this virus is not likely to kill as many people as did HIV/AIDS. Severe economic inequality because wages have been stagnant despite innovation and increased productivity ensures that there are few buyers for big-ticket goods. Price-to-earnings ratios are preposterously high and will soon face a correction. The inverted yield curve will ensure a credit crunch that (1) makes borrowing for high-ticket goods more difficult and costly (2) businesses on life support that depend on further infusions of credit will die when the plug is pulled (3) over-leveraged firms will be in deep trouble as credit costs will eat into operational revenue (4) accounting scandals tend to be exposed as market meltdowns happen. |