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JP Morgan CEO Jamie Dimon stated yesterday; “Markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt. The closer you get to it, you will have panic. There will be stock market volatility and upheaval in treasuries. Such an event would ripple through the financial world, impacting contracts, collateral and clearing housesâ€
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Originally posted by errolanderson View PostJP Morgan CEO Jamie Dimon stated yesterday; “Markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt. The closer you get to it, you will have panic. There will be stock market volatility and upheaval in treasuries. Such an event would ripple through the financial world, impacting contracts, collateral and clearing housesâ€
Trust is leaving the system pretty fast and without that, its a potential house of cards.
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Originally posted by beaverdam View PostFWIW, "Argentina Is Going Broke to Stall a Full-On Currency Collapse"
Around 30 months after taking office, the country found itself in a desperate economic situation, with a troubling run on the peso and a faltering economy given the lack of reserves in the Central Bank’s coffers.
https://finance.yahoo.com/news/argen...180628424.html
What does that typically do to their agricultural production? Inflation is usually good for farmers, do they expand? Or does the capital intensive nature of modern agriculture make it impossible to access the required capital? Less the uncertainty and the resulting tax burden?
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Originally posted by AlbertaFarmer5 View PostArgentina seems to enjoy a currency collapse as with astounding regularity throughout history.
What does that typically do to their agricultural production?
The main reason I posted this, do farmers in Argentina become "holders" of their raw commodities, "quick sellers", or might there be "no change" in their selling pattern? On the input side, fert and chem costs, where do they go for those producers?
and how, if any does that effect Canadian farmers?
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Originally posted by beaverdam View Post"What does that typically do to their agricultural production?"
The main reason I posted this, do farmers in Argentina become "holders" of their raw commodities, "quick sellers", or might there be "no change" in their selling pattern? On the input side, fert and chem costs, where do they go for those producers?
and how, if any does that effect Canadian farmers?
My understanding is they are holding on to inventory as long as possible before converting it to a depreciating currency. Which is why the government had to have their conversion specials on three separate occasions to prop Farmers to sell for a better currency rate.
And that they had purchased their inputs far ahead of time at least a year ago. However in the event of a full-blown currency collapse, I expect the capital would be nearly impossible to come by to buy inputs ahead of time. Might become hand to mouth just out of necessity?
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The interest to finance U.S.debt now exceeds 928 billion annually and spiralling. This debt payment now exceeds the entire U.S. military budget spent yearly.
Houston . . . we have a problem here.
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Originally posted by beaverdam View Post"What does that typically do to their agricultural production?"
The main reason I posted this, do farmers in Argentina become "holders" of their raw commodities, "quick sellers", or might there be "no change" in their selling pattern? On the input side, fert and chem costs, where do they go for those producers?
and how, if any does that effect Canadian farmers?Last edited by biglentil; May 14, 2023, 06:34.
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Home Depot posts worst revenue miss in 20 years. A 'full-on' casualty of the great debt crisis.
But apparently, no recession said by those in-the-know. A miracle or simply economic deception?
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Originally posted by errolanderson View PostHome Depot posts worst revenue miss in 20 years. A 'full-on' casualty of the great debt crisis.
But apparently, no recession said by those in-the-know. A miracle or simply economic deception?
Consumers are starting to trade down and pivot to services from goods
Home Depot’s quarterly earnings offered a reminder of the headwinds facing US consumers.
Home Depot’s quarterly earnings offered a reminder of the headwinds facing US consumers.Photographer: Dustin Chambers/Bloomberg
ByLisa Abramowicz
May 16, 2023 at 7:38 AM CST
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Welcome to the Bloomberg Surveillance newsletter, a daily look at the best interviews and insights from Bloomberg Television and Radio’s flagship morning show co-hosted by Tom Keene, Jonathan Ferro and me. Sign up here if you’re not yet a newsletter subscriber.
‘It’s happening everywhere’
The US consumer has had an amazing propensity to spend, defying all expectations over the past six months and helping to fuel a surprising degree of economic resilience. That is, up until now, when things are starting to get a bit, well … confusing.
On one hand, US retail sales showed that Americans are still spending, albeit with more borrowed money and their savings. On the other, transactions are clearly slowing. We saw this today with Home Depot, which gave a disappointing forecast in light of what the company's chief financial officer called a “broad-based pullback on the part of the consumer with respect to discretionary spend.â€
Home Depot isn't alone as weakness takes hold for sellers of electronics, home improvement goods and home furnishings. “It’s happening everywhere," said Chuck Grom at Gordon Haskett Research Advisors. Grom called this a “discretionary recession,†with this emerging sense of shoppers’ choosiness from buying goods to focusing on services.
relates to Surveillance: ‘Discretionary Recession’ Creeps Across Retailing
“Retailers are going to have a much harder time taking prices from here,†Grom said. “We are seeing the consumers pushing back and trading down.â€
That said, Home Depot’s miss is “not the end of the world,†Grom noted. Certainly, overall retail sales showed some ongoing consumer strength. And Ed Yardeni at Yardeni Research said the economy is, all things considered, “proving to be resilient.â€
But like Grom, Yardeni sees an important slowdown at the sector level as consumers pivot to services. “The Home Depot issue suggests we are not out of the woods yet,†he said.
relates to Surveillance: ‘Discretionary Recession’ Creeps Across Retailing
Pimco’s Tiffany Wilding said the Fed’s rate-hiking cycle is forcing shoppers to tap the brakes as policymakers want. The rub, Wilding said, is that the pullback isn’t yet enough to deliver the results the Fed needs to see before — potentially — it calls time on higher rates and even gets around to cuts.
“Inflation is actually still reasonably robust,†Wilding said. “Obviously at 5% or more it is over the Fed’s target. We expected it to come down but it continues to be stickier than expected.â€
‘Another test of McCarthy’
Wendy Schiller of Brown University’s Taubman Center for American Politics and Policy said the likeliest outcome of Washington’s debt-ceiling showdown remains a 2011-style deal, with some caps on future spending as a sweetener to get Republicans on board. But she nodded to the restive hard-liners in the House GOP.
relates to Surveillance: ‘Discretionary Recession’ Creeps Across Retailing
With some Republicans willing to embrace a default — egged on by Donald Trump — Speaker Kevin McCarthy will find it difficult to corral a majority behind any agreement, Schiller said. “This will be another test of McCarthy and his power over his caucus.â€
The two sides meet again today after President Joe Biden’s lieutenants talked up hints of progress in negotiations with Republican aides while McCarthy poormouthed the discussions as going nowhere.
BTIG’s Isaac Boltansky said his base case is for a short-term extension of the debt limit to create time to craft a broader agreement. “I’m still operating under the old maxim in DC that things are impossible right up until they’re inevitable.â€
Washington’s rhetoric echoes 2011’s, Macro Risk Advisors’ Dean Curnutt said. Even some of the personalities are the same, he added, saying he had rewatched a video of then-Treasury Secretary Tim Geithner that showed him accompanied by New York’s Charles Schumer, the current Senate majority leader.
“It’s going to take some flare-up in market prices to motivate this negotiation,†Curnutt said.
One chart helps frame the reality behind the rhetoric: Buyers of one-month Treasuries aren’t feeling quite as confident as the commentators.
We've gotten to a place of exhaustion with this. All of us — in markets, media and beyond. Tom is keeping engaged by thinking about the contours of the tin can that legislators will inevitably kick down the road: “The can is kept in a hermetically sealed vault in Providence, Rhode Island.â€
Quick takes
Some notable quotes today:
“Ultimately, Chair Powell is going to have to bring the committee together.â€
— Citigroup’s Andrew Hollenhorst, on Jerome Powell’s pivotal role with Federal Reserve officials’ divergence on their assessment of the path ahead. As Jon noted, there’s a subtle splintering underway among policy makers on the Federal Open Market Committee
“I don’t think this banking crisis is over.â€
— BTIG’s Isaac Boltansky
Bloomberg Surveillance is live weekdays from 6 to 9 a.m. New York time. Watch on Bloomberg Television, on the Terminal at TV<GO> and on YouTube; or listen to the show on Bloomberg Radio and RADI<GO> from 7 to 10 a.m. Subscribe to the Bloomberg Surveillance podcast. Check out GTV<GO> for all the charts seen on Bloomberg Television.
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