Juggling Dynamite

Earth to central bankers, listen to this clip to understand why your Q’Eternity tricks are not ‘stimulating’.  Indeed just the opposite, your 15 years of lowering rates and lending standards while offering lax, indulgent ‘oversight’ and deregulation of investment banks worldwide have purchased the present mess and economic malaise.  Merci.

Bloomberg’s Yalman Onaran breaks down why negative rates are not spurring lending. Here is a direct video link.

“Following the European crisis, economies are too highly levered, so companies and consumers they can’t borrow. So when you don’t have demand, people can’t borrow and the banks can’t lend.”   Mystery solved!!

Higher crude prices over the past 6 weeks allowed already heavily indebted energy producers to sell even more debt to ‘investors’. This will enable even more excess production to come to market. So long as the belief in higher prices persists, we are unlikely to find a durable bottom this cycle.

Discussing the potential for the oil production freeze, and current supply and demand dynamics John Kilduff, Again Capital. Here is a direct video link.

People’s Bank of China Governor Zhou Xiaochuan warned in a speech in Beijing on the weekend that corporate debt has become too high. This leaves the companies less able to tolerate the ongoing decline in global sales and increasing delay in the collection of customer accounts.  Chinese insolvencies were up 25% in 2015 and rising…

See: China has a $590 billion problem with unpaid bills.