The dangers arising from the foolhardiness of Trump continue to ripple around the world.
Many of these dangers represent imminent threats to vulnerable people, and the US Congress appears intent on ensuring that they suffer.
Other threats are less obvious, but they will also be dangerous. Take this from an FT email this morning:
Sales of risky European corporate debt surged to about €23bn last month according to JPMorgan data, their highest ever level.
Why is this happening? High-yield, or junk-rated, companies are benefiting from a fall in borrowing costs due to greater demand from investors, taking advantage of a capital flight out of American markets. Yields move inversely to prices. Many investors are shifting allocations away from the US due to President Donald Trump's erratic trade policy and rising government debt. Despite a strong rebound in the US stock market in the second quarter, a continued move away from dollar bonds has driven the currency to its weakest start to the year.
What this means: Even companies that previously struggled to tap the bond market now have access, given the “massive amount of cash to be invested”, one JPMorgan analyst said. Issuers with troubled pasts, or those offering complex and subordinated instruments such as payment-in-kind bonds — where interest can be rolled up into the principal to be repaid on maturity — have also been eagerly welcomed by investors. “Managers are desperate to invest,” said one leveraged finance banker.
I tried to edit that down, but it made no sense to do so. The message is clear and unambiguous. Fund managers, who are being driven out of the dollar, have so much cash in their hands that they are throwing it at anything that is offered to markets, and are investing in what is quite literally junk (I suspect) in a great many cases.
These people are meant to be rational.
They are meant to be wise.
They are meant to be trustworthy.
They probably manage some of your pension, although you are not told about it.
And they are taking massive risks.
There is only one place where this can end, and that is in tears.
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I hope that these Junk Bonds are as beautifully produced as the South American ones that filled the vaults of the Midland Bank in the 1930’s when my father started work there.
Then at least you can frame them and put them on the wall
There’s money in junk. Unfortunately for every winner, there are losers.
Buyer beware would apply, but it is an uneven playing field.
I am feeling very cynical this morning – albeit agreeing with you totally – but I would say it ends in them being bailed out by the staff they employ in our political systems.
A bit off this specific topic, but Lawrence O’Donnell’s segment on ‘the banality of cruelty’, is very much part of your overarching argument here – about the demise of the DEMOCRATIC United States of America. The cruelty of the rapidly emerging authoritarian Trumpist government is beyond keeping up with – but at least O’Donnell tries to explain how – HOW – he’s so totally captured the Republican Party. Astounding.
https://www.msnbc.com/the-last-word/watch/lawrence-what-you-re-feeling-is-the-banality-of-cruelty-from-trump-and-the-republican-party-242567237977
It will end in tears. Greed and short-termism are always bedfellows. One way or another, the public will pay.
Speaking of tears…
https://m.youtube.com/watch?v=ECU-Veuyaec
Good to see she has emotions. For herself, but still, it’s a start.
What we are witnessing is the decline of the US empire, led by a fascist movement. History is populated by failures of fascist regimes, e.gs. Nazi Germany, Mussolini’s Italy, Saddam’s Iraq. They all ended in not tears, but the deaths of their leaders.
The ‘recipe’ to bake a fascist regime is well known to historians, but they are not heard due to the noise of daily life from politicians, vested interests and bloody economists.
What were the lessons learned from past regimes? How did they start, progress, develop to their awful impacts on millions, and more importantly, end?
We need a conference of historians to help end today’s fascist movements. How to organise? Thoughts?