2020 Collapse

There are plenty of German manufacturing companies in Singapore, they pay their staff too well and welfare is very good. For this reason, their overheads is too much and they are losing out to Japanese and Chinese competitors. Nowadays price is more important than engineering.
 
sgbuyer said:
I think the collapse is already in progress in Asia, starting with Hong Kong. The property market in Singapore has slowed down considerably this year, of course, due to anti-speculation curbs but also the general economic uncertainty and slowdown. I read that NYC property has gone bad. Only the dot com 2.0 bubble is still barely inflated but with signs of cracking recently - Softbank. In the meantime, inflation is still going up - it has to in order to pay off the debt load.

The biggest bubble in my opinion is the mark to market values for assets and property in China and India. These look nice on the books as long as there is no financial crisis. If there were a financial crisis of any sort in the region, and investors start to ask for redemption and then it is discovered that there are no buyers or the cash cannot be taken out of the country. ;)
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I agree, not only on the mentioned country, i been around visiting SEast Asian Countries due to my work, they are all in the same dilemma.
 
JohnnyBravo300 said:
Germany is officially in recession. Im sure many others are close.
The US economy has been shrinking but not official "yet".
Manufacturing is almost dead and jobs numbers are abysmal.
More layoffs and closing businesses everyday here.

They cut off our heads to tie a tourniquet around our necks.
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Yes, "ze German economy iz goin' deepa' into ze abiss of recession".

But hey moved so many industries abroad - Hungary is perhaps the best example, it gives home to Mercedes, Audi and recently BMW (started building their new factory recently), Bosch, Carl Zeiss etc. many many more.

Hungary's population is just under 10 million and I estimate the workforce to be somewhere slightly under 5 million.
300,000 people are employed by German companies and the German investments constitute 30 % of the total foreign investments.
 
JNS said:
I agree, not only on the mentioned country, i been around visiting SEast Asian Countries due to my work, they are all in the same dilemma.
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If the "demonocrats" win the US elections, then the "apocalypse soon" scenario is assured. But for some reason I think it'll be angry-clown Trump again:

 
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^
I think Germany can simply "scratch the surface" of recession and climb out of recession.

Poland didn't feel a thing of the 2008 recession. :D

I think the V4 countries (Poland, Hungary, Czech Rep. and Slovakia) could even avoid the recession.
They're well-industrialized (when compared to other former communist countries) and have quite good know-how, old universities (Prague and Budapest are famous), well-skilled labor force.
Since many industries were exported into these countries, they can produce at lower costs and perhaps can still satisfy the dwindling demand for various industrial products etc.

I've found the V4 region interesting, since these countries are way above the rest of formerly communist Europe both culturally/infrastructurally/economically etc. and are tightly linked to the German economy and if you look at the map, then "core Europe" or Central Europe is essentially: Germany, Austria, Hungary, Poland, Czech Rep., Slovakia
img-visegrad.png


Interlinked economies, historically well-connected and generally tend to have quite good political relations as well.

Together, the trade between V4 and Germany surpasses the volume of trade between France and Germany (!).

Although, the V4 countries' collective GDP barely get close to Spain's GDP.

Bascially V4 (Hungary, Poland, Czech Rep., Slovakia) has a collective GDP roughly equal to the sum of Sweden's and the Netherlands' GDP's.

Yet, what's especially interesting about V4:
- population and economy: population of 64+ million people and would rank as Europe's 4th strongest economy
- emerging economic region: they're an emerging economic region "stuck" onto Germany, could be regarded as an area towards which the Germany economy extends
- German language: Hungarians and Czechs are in general good German-speakers; much of this region was part of the Austro-Hungarian Monarchy and Slovakia used to be part of the Hungarian Kingdom (for 1,000+ years); closely-linked historical ties between these countries (especially: Hungary-Poland, Hungary-Slovakia, Czech Republic-Slovakia: used to be Czechoslovakia) etc.
- V4 is more than just an economic alliance: it's a mini-alliance combining cultural, economic, political and military
- V4 is the most prosperous part of the "former communist" parts of Europe
- V4 is culturally and historically Western Europe, was never part of the "East", only communism pushed this region eastewards: study history, explore the architecture, understand culture and you'll see it's by all terms part of the Western Europe (also due to geography, Catholicism and Protestantism, historical ties etc.)
- these countries are re-industrializing: while the UK for instance merely lives from speculative activities, the US has exported most of its industry
- Poland and Hungary quite possibly have the strongest agriculture in the entire EU (France could lag behind, but I'm not sure, just my estimation)

Reference:
https://en.wikipedia.org/wiki/Visegrád_Group
 
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The overnight repo market in the USA is signalling stress in the US financial plumbing. It has the potential to knock over significant dominos (very large and highly leveraged hedge funds) and cause a systemic crisis. The point made in the OP about (market) sentiment is understood - there can be a self fulfilling prophecy effect if news, sentiment, behavior spirals, but there are very real structural issues playing out that can affect the financial currents irrespective of how "woke" the markets are.
 
JNS said:
I agree, not only on the mentioned country, i been around visiting SEast Asian Countries due to my work, they are all in the same dilemma.
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SE Asian countries are too dependent on hot money from China to invest properties and spend their golden week on their beaches. The trouble is this hot money is from the 30 million Chinese officials and newly rich while the other 98% - 1380 million people have trouble with basic necessities, affording pork, finding a wife or buying an apartment. It costs a lot to feed 1380 million people, and make them happy. Unlike Debt burden which can be written off in a single stroke of the pen, you can’t write off people.

I've not touched on the huge military expenses, financing costs for half a trillion of infrastructure on the new silk road, education camps housing millions of people, the medical and nursing costs of 300 million boomers over the next 20 years.

So, it's clear this hot money is not sustainable and will significantly affect SE Asian economies next year.
 
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I have been putting some thought into this...
The repo rate spike is indicative of serious mistrust amongst the major world banks. 9% interest rate is flashing serious risk. Risk of failure of one or more major Banks. Deutsche Bank the most likely candidate for failure. If the U.S. are forced to raise rates and the failure of Deutsche Bank goes mainstream, all the Emerging Market debt which is priced in U.S. dollar will come under stress as the U.S. dollar drives higher. Now I am thinking about a great unwind. Foreign currencies collapsing, trillions of dollars in currency derivatives hitting the market, everybody trying to get out of town on the one small road with an out of control bushfire bearing down. Don't forget that a lot of those of derivatives are insured so to speak and those that provide the insurance are invested in the same nonsense. This will not be just currency derivatives. Bonds will collapse as the reality that Central Banks DO NOT control interest rates takes hold. Now imagine holding negative bearing bonds with interest rates rising rapidly.
Just thoughts...
 
Slimey said:
I have been putting some thought into this...
The repo rate spike is indicative of serious mistrust amongst the major world banks. 9% interest rate is flashing serious risk. Risk of failure of one or more major Banks. Deutsche Bank the most likely candidate for failure. If the U.S. are forced to raise rates and the failure of Deutsche Bank goes mainstream, all the Emerging Market debt which is priced in U.S. dollar will come under stress as the U.S. dollar drives higher. Now I am thinking about a great unwind. Foreign currencies collapsing, trillions of dollars in currency derivatives hitting the market, everybody trying to get out of town on the one small road with an out of control bushfire bearing down. Don't forget that a lot of those of derivatives are insured so to speak and those that provide the insurance are invested in the same nonsense. This will not be just currency derivatives. Bonds will collapse as the reality that Central Banks DO NOT control interest rates takes hold. Now imagine holding negative bearing bonds with interest rates rising rapidly.
Just thoughts...
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Big money is already moving into gold for this reason. Even Goldman Sachs calling for 1600 USD gold next year. The roller coaster is about to get bumpy, better hang on tight!
 
If derivative positions are offloaded under chaotic conditions then gold could cop a short term whacking. This of course would be a short term anomaly but a distinct possibility. Just like throwing the baby out with the bathwater, companies will have no choice when they are desperate to stay afloat (liquid).
 
If Deutsche Bank failed and the German Govt / ECB didn't or couldn't step in within minutes (and I mean minutes) to fund or takeover, the Euro banking sector would immediately seize up with no bank willing to lend to another bank, no bank then being able to roll over / fund corporate debt with bankruptcies soon to follow. Deutsche Bank derivative assets held by other banks / institutions / investors would be valued at zero and written off.....then as the American market opened the contagion spreads and same happens to the US banks and markets and by the time we all wake up to the bad news, the Aust banks in conjunction with Commonwealth Govt and RBA would have already decided overnight to either shut down the banking system for an enforced "long bank holiday" or of they did open, severely limit retail withdrawals and probably prohibit corporate withdrawals.

I don't know if Deutsche Bank will fail but it's a zombie bank at present and IMO the bank, their regulator / ECB , the German govt aren't letting on how bad things are in Deutsche Bank but if they do fail, it'll make the Lehman's failure look like a Sunday picnic.....thus I think the German Govt and ECB are trying to kick this can down the road long enough hoping to unwind some the crap on the Deutsche Bank book to avert s failure or limit the Euro's they will eventually have to kick in to jeep Deutsche Bank alive.
 
Slimey said:
If derivative positions are offloaded under chaotic conditions then gold could cop a short term whacking. This of course would be a short term anomaly but a distinct possibility. Just like throwing the baby out with the bathwater, companies will have no choice when they are desperate to stay afloat (liquid).
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Suits us, we can keep stacking while the shit begins to hit the fan.
 
pmbug said:
The Fed has announced ~$500B (yes, half a trillion US dollars) will be injected into the repo market over the next month to ensure no hiccups knock down dominos.
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FED will soon establish a standing Repo facility. This will act as another version of the Discount Window the FED offers. But since the Discount Window has attracted a bad image, banks don't want to use it. (discount windows allows member banks to borrow directly from the FED in times of emergency)

Standing Repo facility is just another BS operation to get Reserves into banks when things get tough, but they hope everyone is too dumb to understand whats going on. Though as time goes on people are wising up to it all.
 
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