‘The Great Financial Writeoff’

[AlbertaFarmer5]

Promises are going to be broken. Eliminating the concept of savings and positive interest rates will simply destroy govt programs as they rely not only on taxes but interest compounding like it did before 08. This is gonna be a bloody mess.

This will most certainly blow up all of the pension funds, which were going to blow up anyways, just expedite the process. It has been so long since saving was the prudent thing to do, that soon no one will remember that it once was a rational thing to do.

[errolanderson]

And it begins . . . . governments will demand write-offs and clear bad loans from banks. Global commodities remain under intense selling pressure . . . .

https://www.bloomberg.com/news/articles/2019-09-05/turkey-working-on-plan-to-clear-some-bad-energy-loans-from-banks

[macdon02]

And it begins . . . . governments will demand write-offs and clear bad loans from banks. Global commodities remain under intense selling pressure . . . .

https://www.bloomberg.com/news/articles/2019-09-05/turkey-working-on-plan-to-clear-some-bad-energy-loans-from-banks

It'll be interesting once it gets to Europe, the difference in 08 between how the FED and ECB handled the crisis, the Fed took all of Fanny and Freddies toxic assets immediately, whereas the ECB left them in the banks. So the French banks, a huge lender into the energy sector, and Deutsch and Commerz are loaded to the gills with NPL's. I suspect when it hits those, if not slightly before, contagion sets in around the world as traders hunt for the next Big Short. Interesting to note, Richardson just completed the first blockchain transaction for grain with Bangladesh. I believe this is being done to limit the risk with letters of credit in the transaction.. stay tuned.

[errolanderson]

2020 may welcome in much greater volatility and risk to the investor, particularly for global equities. There is the potential for supply shocks, the uncertainly of the ongoing U.S. trade war, unproductive debt and certainly the mess in Europe are all ignition points for volatility. Now stir-in, the U.S. election . . . .

But today, equity markets continue to parade as if nothing is wrong. A clique, but a perfect storm (IMO).

[jensend]

Haven't we already seen inflation in housing, agricultural land and the equity markets? That's what low interest rates have already done. Negative interest rates might give a little bounce. Negative interest rates indicate an economy on life support. Most life support cases don't recover. Then you'll have deflation.