Daily Digest 10/2 – Student Loan Debt Soars, There Is Good Reason to Fear the Repo

 

Economy

Student loan debt soars, totaling $1.6 trillion in 2019 (Saxplayer00o1)

Video

Developed central banks expected to see biggest ‘synchronised easing’ since 2000 (Saxplayer00o1)

Slower global growth is pushing central banks to ease policy across the world

Australia central bank governor tells banks ‘don’t be scared to make loans’ (Saxplayer00o1)

One risk is that further cuts to interest rates would fuel a debt binge in property sector when the household debt-to-income ratio in Australia is already at a record peak of 190%.

Down is the only way: Emerging central banks deliver more rate cuts (Saxplayer00o1)

Interest rate moves by central banks across a group of 37 developing economies showed a net 11 cuts last month.

In August they delivered a net 14 cuts – the largest number since policymakers ramped up measures to kick-start growth in the wake of the financial crisis.

Negative interest rates are inflating real estate prices. These cities are at risk of a bubble (Saxplayer00o1)

The European Central Bank in September pushed interest rates deeper into negative territory and announced a fresh stimulus package to kickstart flagging economic growth. But loose monetary policy has done little to boost borrowing and spending by businesses and consumers. Instead, owners of financial assets have benefited, borrowing heavily at very low costs to pour money into property or stocks in the hunt for better returns.

There Is Good Reason to Fear the Repo (Saxplayer00o1)

In other words, the Fed appears to be losing control of the fundamental narrative that undergirds much of its power as the setter of American monetary policy. When banks believe the price of money is different from what the Fed says it is, something has to give.

Midwest’s Faltering Economies Will Spread Pain Nationwide (Adam)

One heartbeat of the Midwestern economy, farming, has been under serious pressure throughout the spring and summer. Agricultural exports to China have plummeted over the past two years, particularly soybeans. While a wet planting season kept crop yields in check, the lack of crop buyers has kept prices for soybeans and corn under pressure, too, which has been a double whammy for farmers.

Dow Jones Turns Lower On Weak ISM Data; Online Brokers Plunge On Schwab News (Thomas R.)

On July 16, the Dow Jones Industrial Average reached a record high of 27,398. After a mild correction, the index is not far off that high. Elsewhere, the Nasdaq and S&P 500 are also near record levels set in July, but testing support around their 50-day moving averages. The Nasdaq gave up its 50-day line amid last week’s sell-off, but is now trying to retake that level.

US manufacturing survey shows worst reading in a decade (Thomas R.)

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” Timothy Fiore, ISM chair, said in a statement.

$300 Oil: What If The Attacks In Saudi Arabia Had Destroyed Production? (Thomas R.)

Days after the attacks, some analysts were forecasting $100 Brent prices, but there were also more sober minds that said there was no reason for oil to rise so high given that some OPEC+ members could increase production and that U.S. shale would do the rest. But this reliance on U.S. shale and other OPEC members are perhaps a little optimistic in such a scenario.

Sacramento gas prices up 25 cents in past week. California costs soar, bucking U.S. trend (Thomas R.)

Meanwhile, the U.S. average fell 1.9 cents per gallon since last week to a current rate of $2.64. The fall came as oil prices rebounded after Saudi Arabia restored oil production and processing, GasBuddy analyst Patrick DeHaan said in a statement. Massive fires and large explosions at major oil facilities were reported in Saudi Arabia in mid-September.

China’s Renewable Boom Hits The Wall (thc0655)

In its latest International Energy Outlook, the U.S. Energy Information Administration poured cold water on the hopes of many climate change fighters by estimating global energy demand will increase by as much as 50 percent between 2018 and 2050. That’s under the EIA’s reference case scenario, that is, the middle ground between the scenario of high economic growth, under which energy demand growth will be even greater and the scenario of low economic growth, which could give the planet a breather.

Food Is Freedom: How Washington’s Food Subsidies Have Helped Make Americans Fat and Sick (Alex)

All told, the U.S. government spends $20 billion annually on farm subsidies, with approximately 39 percent of all farms receiving some sort of subsidy. For comparison, the oil industry gets about $4.6 billion annually and annual housing subsidies total another $15 billion. A significant portion of this $20 billion goes not to your local family farm, but to Big Aggie.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/1/19

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the “3 Es.”

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