Dow Jones plunges 767points, Nasdaq down 278points, S&P down 87points



Dow Jones plunges 767points

Nasdaq down 278points

S&P down 87points

It looks like the Trade war + Trump + Hong Kong protests + Brexit could finally be the long awaited 4 Horsemen of the global economic apocalypse turning up in a delayed Uber.

The debt black hole that is dragging down interest rates has caught the global economy in its tortuous and fatal gravity.

Expect those KiwiSaver balances to be smashed this week.

Adrien Orr’s demand that the Banks prepare themselves for a once in 200 year meltdown is looking more and more vital for the economic survival of NZ and it casts Shane Jone’s defence of Orr last night on Q&A as a warning that a hard rain is going to fall.

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Everyone knows the recession is coming, that the 10years of quantitive easing to prevent meltdown last time has only built to apocalypse levels of debt now.

The event horizon awaits and the question must be, can this government put enough ideas together to withstand a global economic crisis?


  1. This is what Elizabeth Warren had to say about two weeks ago:

    “Our Precarious Economy
    Household debt. A generation of stagnant wages and rising costs for basics like housing, child care, and education have forced American families to take on more debt than ever before. The student debt load has “more than doubled since the financial crisis.” American credit card debt matches its 2008 peak. Auto loan debt is the highest it has ever been since we started tracking it nearly 20 years ago, and a record 7 million Americans are behind on their auto loans — many of which have similar abusive characteristics as pre-crash subprime mortgages. 71 million American adults — more than 30% of the adults in the country — already have debts in collection. Families may be able to afford these debt payments now, but an increase in interest rates or a slowdown in income could plunge families over a cliff.
    Corporate debt. Corporations are also deeply in debt. Leveraged lending — lending to companies that are already seriously in debt — has jumped by 40% since Trump took office, spreading “systemic risk” throughout our financial system. These high-risk loans now make up a quarter of all American business loans, and they look a lot like the pre-2008 subprime mortgages: poorly-underwritten loans with minimal protections that are then packaged and sold to investors. I’ve warned regulators about my concerns — which experts share — but their tepid response shows they haven’t learned the lessons of the last crisis.
    Manufacturing recession. Despite Trump’s promises of a manufacturing “renaissance,” the country is now in a manufacturing recession. The Federal Reserve just reported that the manufacturing sector had a second straight quarter of decline, falling below Wall Street’s expectations. And for the first time ever, the average hourly wage for manufacturing workers has dropped below the national average.
    The country’s economic foundation is fragile. A single shock could bring it all down. And the Trump Administration’s reckless behavior is increasing the odds of just such a shock.
    The administration may breach the debt ceiling in September, leading to economic turmoil that top economists say would be “more catastrophic” than the collapse of Lehman Brothers in 2008. Trump’s trade war with China threatens American manufacturing and has already hurt American companies that investors think of as “industry bellwethers,” while feeding an all-time economic slowdown in China that could have dramatic ripple effects on the American economy. And Trump is goading the U.K. toward a no-deal Brexit, which even his own administration acknowledges would have “immediate and significant spillover effects” to our economy.
    The financial markets agree that there is a serious risk of downturn in the near future. The U.S. Treasury yield curve — a barometer for market confidence — normally slopes upwards because investors demand higher yields for bonds with longer maturities. But this March, it inverted for the first time since 2007, signaling that investors are so worried that things are going to get worse that they’d rather lock in lower rates for the future today than risk long-term rates going even lower. The curve has inverted before each and every recession in the past half century — with only one false signal.
    And experts agree. In a recent survey of nearly 300 business economists, three-quarters expect a recession by the end of 2021 — with more than half thinking it’ll come by the end of 2020.”

  2. Yes if things turn sour NZ will be hit hard but that what’s happens when you build an economy largely based on foreign ownership and influence. One would have though the hard outcome dealt to the Irish who are in some respects similar to NZ would have been a decent object lesson but of course the complacency of the NZ establishment should never be underestimated.

    This is why we need parties who are willing and able to walk away from global neo liberalism. That of course also requires a mainstream media who in large part stop supporting it and a public who are willing to see cold hard facts for what they are and stop indulging in the self defeating game of fake left/right competitive politics that pervades this country.

  3. The U.S. will not allow China to become a super power that threatens to usurp its hegemony, which is really what these tariffs are all about. China has responded to the latest tariffs (10% on almost all imports to the U.S.) by simply devaluing their currency so that its exports remain largely unaffected (China clearly doesn’t care about the inflationary impact this must have on its own people). Trump will likely double down and hike the tariffs to 25%, which is why markets are rattled. China likely won’t be able to counter that with even further currency devaluation. The U.S. will “win” this trade war ultimately imo, but there is still a long way to go.

    • Fail to see how they can win when they make very little except weaponry any more and if it werent for the slowly hemoraging petroDollar, eyewatering levels of debt. The Whitehouse has openly shown the world that treaties and any kind of deal making is only temporary and always viewed as zero sum so that petrodollar aint gonna mean much soon. Funny how all financial arrangements rely on something as ephemeral as confidence but funnier still that the Whitehouse believes they can trash said confidence on a global scale and still come out winners

      • The US will get brought down by internal (NOT external) issues. The elephant in the room is the fact that 20-25% of the US economy is already healthcare and this sector continues to grow faster (roughly 8-9% pa) than the GDP (~3% at best) needed to sustain it – i.e. healthcare threatens to eventually consume the entire US economy, something which obviously can’t and thus won’t happen. The hard wall will be reached in roughly 2024, when something mathematically has to give.

  4. Tiiiiiimmmmbberrr! This is precisely the result of not learning our lesson on what low interest (free money)and continuing to rollover our Mortgages & utilize. Cheap Top ups to buy more Toy’s, Rental Property’s, Shares off your equity & trusting that the hayday would go on forever.. so when Property values collapse you will be scrambling to sell off all those toys to stay ahead of the Foreclosure man handing you that overdue payments notice with a fat penalty payment attached.
    The Banks are friendly if you have cashflow, not so much when the trickle down from the market. stops…

  5. God isn’t it a shame we don’t have an agricultural primary industry that supports 4.7 million people by the 52 thousand people making their sole income from agararian enterpirses to earn our foreign exchange? People who make foods and wines and wools and fabrics and timbers and textiles and fishes and fruits…? You know? Those things and what not? Nothing vital nor important nor that there. And lets not forget the sobering spectre of a global climate breakdown looming. Who’s going to financially protect us and feed us?
    Oh wait? We have Auckland and it’s property market with the Ferarri’s bought with GST refunds!? So we’ll be ok then. Whew! I was worried there for a moment.

    Sarcasim: noun [ mass noun ]
    the use of irony to mock or convey contempt: she didn’t like the note of sarcasm in his voice.
    ORIGIN mid 16th cent.: from French sarcasme, or via late Latin from late Greek sarkasmos, from Greek sarkazein ‘tear flesh’, in late Greek‘gnash the teeth, speak bitterly’ (from sarx, sark- ‘flesh’).

  6. ” The event horizon awaits and the question must be, can this government put enough ideas together to withstand a global economic crisis?”

    There’s another rquestion.
    Who the fuck put us in this vulberable position in the first place? We were doing fine ( 50 years ago! ) until some fuck/s hobbled us? Is it not time to look for who that was?
    ” Ideas put together to withstand a global economic crisis” Ba hahaah ahahahah ahahahaha ahahahahahahhaha ah ahaha hahah a a a a a a a a a a ….. Can’t breath, can’t breath….. Hahahahhaa hahaha ahahaha a haahahahahaha
    Wait, wait…? Ba hahhahaha ahahahahaha ahaha ahaha hahahahahahahahahaha a a a a !
    We could sell jonky’s pool water to other hair fetisists?
    Big mike hoskings could get a good price for his Ferarri in Gore once sold to bogans?
    Here’s a thing.
    fay? richwhite? The holyoak clan? muldoon? jimbo bolger? roger douglas? nordmeyer? gibb? chandler? hart? richardson? quigly? etc, etc….and all you deviant, lazy, exploitive cunning other bastards? You fucked it? What are you going to do now? Where are you going to hide? Somewhere flash? fay? In Switzerland? hart? In NYC?

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