Now Companies Are Getting Paid to Borrow - (www.wsj.com) Investors are now paying for the privilege of
lending their money to companies, a fresh sign of how aggressive central-bank
policy is upending conventional patterns in finance. German consumer-products
company Henkel AG
and French drugmaker Sanofi SA each
sold no-interest bonds at a premium to their face value Tuesday. That means
investors are paying more for the bonds than they will get back when the bonds
mature in the next few years. A number of governments already have been able to
issue bonds at negative yields this year. But it is a rare feat for companies,
which also ask investors to bear credit risk. The move has been driven by the
European Central Bank’s expansion this summer of its bond-buying program from
government to corporate debt, creating more demand for bonds and pushing down
their yields. But even ifthe pricing is explainable, some investors are still
trying to come to terms with the idea.
Crude
Oil Freight Rates Plunge to Record Lows - (www.wolfstreet.com) The
rates for shipping a tanker-load of crude oil by Very Large Crude Carriers
(VLCC) from Rotterdam, Europe’s largest port for the throughput and storage of
crude oil, to Singapore, the world’s largest crude oil transshipment center,
have dropped another $200,000 since the last assessment, to $2.25 million,
according to S&P Global Platts, the lowest level for that route since Platts
started tracking VLCC data in 2006. That’s down by $4.15 million from the $6.4
million price tag in January – a 64% plunge in eight months! Platts blamed the
“large supply of available ships” on the Europe to East route. Overcapacity in
face of lackluster demand is a terrifying condition if it spreads far enough
across an industry. As prices get totally crushed, it can lead to
bankruptcies and the collapse of entire industries, huge job losses,
and massive capital destruction that will spread deeper into the overall
economy.
Busiest Year for High-Grade Corporate Bonds
Back With a Bang - (www.bloomberg.com) Corporate
bond issuance went from a summer lull to a new milestone on Tuesday. Europe’s
Sanofi and Henkel AG became the first companies outside of the banking industry
to raise debt with yields less than zero. Issuance on both sides of the
Atlantic kicked into a higher gear after Monday’s Labor Day holiday in the
U.S., with companies including Siemens AG and Home Depot Inc. announcing plans
to sell more than $18 billion of bonds. “This is what happens when you get back
from Labor Day,” said Tom Murphy, a money manager at Columbia Threadneedle
Investments. “September is supposed to be a pretty big month. It’s coming off
August, which was a record month for issuance as well. At this point, the
market is set up to absorb it well.”
"It's
Worse Than The Great Depression" - One In Six Prime-Aged Men Has No Job - (www.zerohedge.com) While
Obama has repeatedly touted the sub-5.0% unemployment rate (4.9% most recently)
as confirmation his "economic recovery" has been successful, what has
received far less media attention has been the unprecedented surge in Americans
no longer in the labor force, which as of August stood at a near-record
94.4 million.
And while the traditional response by economic apolists and the media has been
that this number is the result of a demographic change in US society, with
mostly older workers no longer in the labor pool, we have over the years argued
that that is misleading, and that millions of prime-aged workers have fallen
out as a result of drastic changes to America's job market, coupled with
structural lack of demand for legacy jobs, which has - for example - sent the
number of employed waiters and bartenders to all time highs even as the number
of manufacturing workers is lower than it was in December 2014.
Fading College Dream Saps U.S. Economy of
Productivity Miracle - (www.bloomberg.com) For
decades, a growing pool of college graduates poured into the U.S. labor market,
boosting productivity and shaping America’s status as the world’s dominant
economic power. That driver of growth is diminishing. Enrollment has declined
every year since peaking in 2011, according to the Census Bureau and the
National Student Clearinghouse Research Center. The reasons include an aging
population, rising tuition costs and a healthy rate of hiring that lessens the
demand for learning. Lamenting the end of the so-called productivity miracle
are Federal Reserve officials and economists more broadly, who hailed its
ability to allow faster growth without harmful inflation. Now, central bankers
largely powerless to fix the schooling slump say something must be done to
counter it to prevent a new era of weaker growth.
Treasuries Climb, Dollar Slumps as Traders Pare Fed-Hike Wagers
- (www.bloomberg.com)
First Factories, Now Services Signal Cracks in U.S. Economy - (www.bloomberg.com)
First Factories, Now Services Signal Cracks in U.S. Economy - (www.bloomberg.com)
Emerging Markets Gain With Rand, Aussie in Hunt
for High Yields - (www.bloomberg.com)
Asian Stocks Rise as U.S. Jobs Pare September Rate-Hike Outlook - (www.bloomberg.com)
G20 promises to coordinate on economy, but little in way of concrete steps - (www.reuters.com)
Asian Stocks Rise as U.S. Jobs Pare September Rate-Hike Outlook - (www.bloomberg.com)
G20 promises to coordinate on economy, but little in way of concrete steps - (www.reuters.com)
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