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Is It Really About Political Turmoil? Or, Just A Falling World Economy?

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Terrel L. Shields

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Art Berman is an oil analyst who points out that folks are angry, they are pulling in their horns, and lashing out at the rich, etc. But the basic problem is the world economy is weak. It has much less to do with immigration, borders, or religious wars. People are angry because their standard of living is falling and for some, that standard was not high to start with.

"Money is a call on energy" - Low energy prices reflects a huge glut of oil and natural gas, particularly "light oils" which is in storage and has no where to go. This oversupply is hand in hand with an economy that is stagnate worldwide. China, India, the Middle East...now Brexit and the EU in turmoil.

Who would have thought that the price of oil was going to be proxy for the economy as a whole?
 

Randolph Kinney

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There is so much distortion in commodities, price, supply and demand that zero interest rates and negative interest rate have caused that the world markets are artificial, not reality.

There is a limit to central banks buying up debt. At some point, like Japan, they must buy equities to keep the game going. The government will own the means of production financed by its own debt printed with money from the central bank buying the debt.

Has anyone noticed that companies buy their own stock with borrowed money (replacing equity with debt)?

Has anyone noticed that companies buy their competitors rather than expand their own operations and layoff people that become surplus due to duplication of jobs?

More full time jobs are replaced with part time jobs which disguises the real employment nature.

There is a limit to this madness.
 

gregb

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Wasn't it Jerry "moonbeam" Brown that declared "less is more"? I am trying to buy into this roller coaster economy by taking on fewer assignments, with better clients and making nearly as much as before or that I need to make. Adapting to AP where I am getting to cherry pick 2-3 assignments a week out of 6-8 offered, altering the fee and tat to meet my needs. AMC's have no chance to get into the door. :)
 

Restrain

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The number of corporations in public ownership has declined sharply. Restaurants, which are the 'canary in the mine shaft' are declining sharply with bankruptcies up significantly, chains being consolidated.
 

Randolph Kinney

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Why so many restaurants are filing for bankruptcy

But the current wave of bankruptcies is definitely unusual, and rivals the chain bankruptcy wave of 2009 and 2010, when several chains filed for debt protection after sales fell.

In this case, the wave of bankruptcies is largely due to a decline in sales at restaurant chains that is particularly harmful to companies that are already walking a balance-sheet tightrope. The companies that filed for bankruptcy recently were already weak.

A few have filed for bankruptcy before. Buffets LLC, owner of Old Country Buffet, HomeTown Buffet and Ryan’s, has filed three times; Fox & Hound and Champps, two times. Same with Johnny Carino’s.
 
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