IS THAT A STORM ON THE HORIZON?? The economic situation is serious enough I have to report on it. The shock to the global economy from Covid-19 has been quicker and more severe than the 2008 global financial crisis, where stock markets collapsed by 50% or more, credit markets froze up, massive bankruptcies followed, unemployment rates soared above 10% and GDP contracted at an annualized rate of 10% or more. Of course, this is generally speaking. Some countries such as Australia (who have managed to control the virus quite well compared to other countries) have been seeing their stock remain stable in some areas. Many people are still using the best stock market app australia has in order to keep afloat in these unstable times.
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Thankfully, the government have stepped in to help some of the smaller businesses who are going to suffer worst from this. You can visit Zenefits for a List of COVID loans for businesses if you are worried about your business at this moment in time.
This is a short post on what may be a significant sign…Glencore stock went into a freefall and lost 29% of its value yesterday. There are signs globally of trouble. There are many indicators of a weak U.S. economy…for instance, Medicare is paying out more it takes in, and so will Social Security. Will our economy continue to muddle forward or are we seeing distinctive signs of a global economic meltdown that will pull us further down?
WHAT IS HAPPENING?? In 2008, Lehman Bros. and AIG made news by collapsing. There is a company called Glencore which may replicate what happened to AIG in 2008. Glencore was the biggest stock exchange float in British history, and via its stock increases its leadership became filthy rich. They own stakes in mines around the world incl. copper in the Demo. Rep. of Congo, chrome, platinum & vanadium in So. Africa, and zinc in Kazakhstan. They tried unsuccessfully a few years back to corner the zinc market. Zambia, one of the countries with Glencore mines has its currency, the kwacha, in a freefall. Glencore stock lost 29% of its value yesterday. This year its stock lost 75% of its value. Investors saw 30 billion pounds of investments evaporate.
WHAT WE ARE TOLD. Today, analysts from the Rothschild Citibank said positive things about Glencore, saying that it was being treated “unfairly” by investors and that it should still post an annual profit of about 4.9 bil. pounds (about US$7.5 billion). Also today, the company publicly announced it was “operationally & financially robust” and that it had sufficient funds for what might come at it. Meanwhile earlier this month they halted mining operations in Africa, sold assets, and suspended dividend payments. They are reported heavily in debt. So are they doing great, or are they in trouble?? Will they lead us in the upcoming collapse?
IS THE GERMAN ECONOMY STALLING OR SPEEDING UP? Depending on who you listen to, you get different stories. Germany is the largest economy in Europe and they lead the world in a number of areas: they are the top site globally for trade fairs, they are the leading producer globally for wind turbines & solar energy technology, & Germany had the highest trade surplus of any nation globally in 2014. European financial markets are deep in the red. Its FTSE 100 score recently lost 100 pts. And as some of you have noticed, the German Volkswagen got themselves in serious trouble by faking emissions tests involving 11 million cars. That is surprising for us who know how dedicated the Germans are to quality. The German finance minister today said the VW scandal would not affect the German economy. Of course, this is not the only issue that Volkswagen is facing. In recent years, there has been a surge in Lemon Law cases that have undoubtedly had an impact on the company. In case you did not know, Lemon Laws are regulations that attempt to protect consumers in the event that they purchase a defective vehicle or other consumer products or services. You can find more information about Lemon Laws by taking a look at this fascinating guide that also explains how a VW buyback works. It will, therefore, be interesting to see what else the future has in store for VW if these legal issues continue. Much of Europe has a sluggish economy…if the German economy starts to stall, then you know Europe is in trouble.
THINGS ARE SERIOUS ENOUGH that you already will certainly want to take actions to mitigate what could happen if this global meltdown continues.