Author: admin

Authored by Joseph Sorrentino via HumanEvents.com,

We need to trust in the free enterprise system – now more than ever…

According to Alexandra Ocasio Cortez, “No one ever makes a billion dollars. You take a billion dollars.” At least, that’s what the Representative from New York recently argued at a Martin Luther King, Jr. Day event in Harlem.

Speaking hypothetically about billionaires making widgets, she added: “You didn’t make those widgets. You sat on a couch while thousands of people were paid modern-day slave wages, and in some cases real modern-day slavery.” According to AOC, the mechanisms of capitalism not only allow, they mandate theft. In her view, business success is synonymous with the mass exploitation of labor.

AOC is far from alone. Many leading Democrats have condemned the wealthy and blamed them for nearly all modern-day plights–a tactic that has proved useful at arousing populist anger on the campaign trail. It appears to be working, and not just in places or with demographics we would expect. A recent CBS News poll revealed that Texas Democratic primary voters view capitalism (in comparison to Socialism) even less favorably than California Democratic primary voters.

If this poll is to be believed, Texas Democratic primary voters view capitalism less favorably than California Democratic primary voters (?!) https://t.co/iSyzgt4CUE

— Michael Tracey (@mtracey) March 1, 2020

The rhetoric and debates coming out of the left—and, at times, even the right—have fixated on how much to tax wealth, instead of how to help create wealth. With Andrew Yang’s exit from the Democratic primary, we lost one of the few candidates who talked openly about declining entrepreneurship and the importance of business creation as an antidote to economic decline.

And it’s not just the politicians that have scapegoated capitalism. Plastered across our newspapers, there are headlines like, “Capitalism is in crisis,” “Capitalism is failing,” or “Capitalism, as we know it, is dead.” (The latter was most recently expressed in a New York Times editorial by billionaire Salesforce CEO, Marc Benioff, who amassed his considerable wealth thanks to … capitalism).

This consistent bombardment is not only reshaping political discourse but impacting how young Americans view the future. At a time when global competition is heating up, and America’s innovation boom from decades past has slowed, the need to inspire faith in free markets has never been more urgent.

THE STARTUP DEFICIT

A recent YouGov poll revealed that nearly half of all millennials and gen-Xers hold an unfavorable view of capitalism. The same poll also found that more than 70 percent of millennials would, if given the opportunity, vote for a socialist candidate. According to a recent poll from Gallup, less than half of young Americans—45 percent—view capitalism positively. “This represents a 12-point decline in young adults’ positive views of capitalism in just the past two years and a marked shift since 2010, when 68 percent viewed it positively,” notes Gallup.

This ideological shift comes at a perilous time. The world is in retreat from the failures of globalization, and, as resurgent nationalism takes hold in its place, cooperation between economies is morphing into fierce competition. For evidence of this, one need look no further than the recent fiery exchanges between the UK and the EU over Brexit terms. It is becoming clear that a nation’s economic strength, more so than military power, will determine standing in the world order. And America is no exception.

Unfortunately, entrepreneurship and innovation have been steadily declining in the U.S. for years. We have fewer high-growth firms, especially in high-tech sectors, and those firms that do achieve high growth have been creating fewer jobs. According to economist Tyler Cowen, “These days Americans are less likely to switch jobs, less likely to move around the country, and, on a given day, less likely to go outside the house at all […] the economy is more ossified, more controlled, and growing at lower rates.”

Regardless of how you assess it, all indicators point to a downward trend. Measured as the ratio of new firms to total firms, entrepreneurship in the U.S. declined by around 50% between 1978 and 2011. Meanwhile, people working for big firms (those employing more than 250 people) rose from 51% to 57% of the overall workforce, and the average firm size increased from 20 to 24 people over the same period. These are indicators that people have grown more risk-averse and are increasingly reluctant to trade off stability to start something new—something called the startup deficit.

Several measures also indicate that entrepreneurs are less innovative. The ratio of patents to GDP in the US is declining, and the cost of patenting is increasing. The age of inventors, and when they registered their first patent, are on the rise— signaling an increasing barrier to entry for the young and cash-strapped. Plus, as economist Nicholas Bloom and his co-authors have found, “research productivity for the aggregate US economy has declined by a factor of 41 since the 1930s, an average decrease of more than 5% per year.”

It’s easy not to focus on these metrics when we’ve recently been showered with positive news about the economy. But the startup deficit means lower productivity, and less wealth creation over the long term. This is a trajectory that is certain to see us displaced from atop the world’s leader-board.

TRADING IN AMERICA’S ECONOMIC FUTURE … FOR VOTES

As far as policies are concerned, the solutions are reasonably straightforward: break up monopolies, improve competition, allow markets to work better, and (perhaps most importantly), incentivize the young and ambitious to take risks, lots of them. As financier and author Nicholas Nassim Taleb notes: “the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error.”

That trial and error is the backbone to a healthy and growing economy. Entrepreneurs discover unmet needs in society and fill them with new goods or services. They take risks without certainty of reward. They improve on existing technologies and invent whole new ones—the iPhone AOC uses to vilify billionaires on Twitter among them. And in difficult economic times, entrepreneurs help create new jobs and find unique ways to provide society with the goods and services they desire.

Policy can only take us so far. This is why we also need a shift at the level of political rhetoric.

At a time when we should be relentlessly focused on stimulating business creation, our would-be future innovators are learning that to be a successful entrepreneur is akin to being a modern-day slave driver. They learn that to take the risk to start a business, or to pursue material wealth, is to start down a road that inevitably leads to a life of immorality.

We’re in desperate need of a different dialogue. As Warren A. Stephens notes:

“By virtue of living in the United States, we are all capitalists … I hope for a day when young people no longer reject that concept but revel in it. As a country, we need to reclaim our pride in capitalism and remember that the markets have the greatest power when they are free, and that free markets empower one and all, not just the few and the select.”

Leaders and politicians have a choice: continue to denigrate examples of financial and entrepreneurial success for short term political gain—or leverage them as powerful tools for inspiration. America’s economic potential hangs in the balance.

Following President Trump’s decision to ban all travel from Europe to the US for 30 days, The State Department has issued a Level 3 Global Health Advisory, urging Americans to reconsider travel abroad:

Global Level 3 Health Advisory – Reconsider Travel

The Department of State advises U.S. citizens to reconsider travel abroad due to the global impact of COVID-19.  

Many areas throughout the world are now experiencing COVID-19 outbreaks and taking action that may limit traveler mobility, including quarantines and border restrictions. 

Even countries, jurisdictions, or areas where cases have not been reported may restrict travel without notice.

For the latest information regarding COVID-19, please visit the Centers for Disease Control and Prevention’s (CDC) website.

*  *  *

This is one step away from an official travel ban.

This is escalating very quickly.

22 year old FX trader Kevin Perry has pleaded guilty to defrauding his investors in an FX scam that started when he was just a teenager.

A release from the U.S. Attorney’s Office in the Northern District of Georgia on Friday said that “Perry led investors to believe that his investment company, Lucrative Pips, was successfully earning substantial profits by investing in the foreign currency (or “forex”) market.”

He told investors’ that their initial investments were secure from loss, but his company was never even registered as a commodity pool operator with the Commodity Futures Trading Commission, the Department of Justice said in their complaint. 

He falsified historical returns that he represented to investors while turning around and using investor cash to enrich himself or pay off his other investors. He also falsely promised an undercover agent that an investment of $10,000 would return a profit of $19,000 to $25,000 per month.

U.S. Attorney Byung J. Pak said: “Clients that invested with Perry’s company were assured they were secure from loss. Actually, Perry was enriching himself and paying off other investors.  We encourage citizens to be cautious with investments, and to remember that if it sounds too good to be true, it probably is.”

Chris Hacker, Special Agent in Charge of FBI Atlanta said: “This guilty plea will be little solace to the victims who lost their savings because of Perry’s personal greed. The FBI is determined to root out and prosecute anyone who undermines investor confidence at the expense of innocent victims.” 

 

Earlier today, we reported that Boeing shocked the investing community when it announced that due to “market turmoil”, it would immediately draw down on its full $13.825 revolving credit facility, an unprecedented move for a company Boeing’s size and valuation, and one which was some took as an indication of how frail Boeing’s liquidity state was, ostensibly confirmed by Boeing’s surging default odds measured by its 5Y CDS.

We disagreed: after all, why would Boeing rush to draw attention to its own funding challenges by fully drawing on its revolver when it knew full well that it had access to the money, safe and sound, located at its syndicate banks…  unless of course Boeing was in fact worried about the viability of said banks. AS a result, we said that the real reason Boeing did what it did was simple, especially to those who recall what happened in 2008 all too well: Boeing is worried that banks will pull their committed funding, which in turn means that Boeing appears to be worried that a 2008-style financial crisis is imminent, and is shoring up all the liquidity it can, so as not to remain at the mercy of its banks which may refuse to extend it credit at any one moment if their own liquidity is threatened.

Which is why we also concluded that now that Boeing, “one of America’s most valuable companies, has shown which way the wind blows, expect thousands of less creditworthy companies to follow suit as they scramble to cash in on every dollar in available revolver funding before the banks pull it.“

We had to wait just a few hours for this prediction to come true, because later on Wednesday, Bloomberg reported that two of the world’s biggest PE firms, Blackstone and Carlyle, have told their portfolio companies to immediately do what Boeing did earlier in the day: “Do whatever it takes to stave off a credit crunch”, which as in the case of Boeing, is a polite way of saying: your banks may pull their liquidity (i.e., fail), so get whatever cash you can now when you can, and not when you have to.

According to the report, the dozens if not hundreds of businesses – all smaller than Boeing of course – controlled by the PE titans are joining a growing wave of corporations drawing down bank credit lines to help prevent any liquidity shortfalls amid signs of mounting stress in markets. At Blackstone, which has weathered a variety of crises in its 35 years, the focus is on sectors hurt by the coronavirus, such as the hospitality industry, as well as energy firms facing a slump in oil prices.

At Carlyle the measures aren’t quite as widespread yet, although the firm has been having broad discussions with management teams at portfolio companies and recommended drawing credit lines in certain instances, with the “decisions are based on industries, regions and other factors.”

Beside Boeing, Blackstone and Carlyle, other companies which announced plans to drawdown on their full revolver were Hilton Worldwide and Wynn Resorts, all reflecting the uncertainty coursing through corporate America as the US economy hurtles into recession.

Think of it, as companies lining up at their favorite ATM machine to pull all the money that is in the account. It works until suddenly it doesn’t.

And here is Bloomberg confirming, through clenched teeth, what we said earlier: “A sudden and sustained increase in companies tapping credit lines could eventually strain banks if conditions become so dire that borrowers won’t be able to meet their obligations.“

See, it’s not market conditions, but a loss of faith in the banking sector, and the reason why it was so difficult for Bloomberg to admit it is that while toilet paper runs do not lead to a collapse of the financial system, fiat paper runs to, and all that would take for those to begin is a loss of faith in the US banking system…. just like that exhibited by Boeing and some of the smartest financial professionals in the world.

The big irony of course, is that by pulling down on revolvers en masse, US companies can trigger just the liquidity crunch they are seeking to protect themselves again, because as we noted earlier, liquidity in the US financial sector is already dismal and getting worse with every passing day, hence today’s latest expansion to the Fed’s repo cailities among a surging FRA/OIS spread.

 

As Bloomberg explains, “lenders offer revolving credit lines to strengthen relationships with companies and don’t typically intend for them to be drawn upon en masse.”

In normal times, revolvers serve as the corporate equivalent of credit cards, giving companies room to borrow as needed and repay when shortfalls ease. Under normal circumstances, the lines are seldom maxed out. Extensive use can be seen as a harbinger of distress.”

The fact that everyone is drawing down on their revolver, however, shows three things:

1. these are not normal circumstances
2. the US financial situation is on the verge of distress, and
3. they remember what happened in 2008, when one bank after another collapsed the availability on their revolver to troubled companies and sectors, and this time it will be the banks left with holding the short stick.

That said, oil and natural gas companies are under particular focus as they tend to suffer a spike in funding stress when prices fall, because their credit lines are periodically updated based on market prices, motivating companies to tap them early.

But why Boeing? The company’s cash flow is one of the most stable in the world… except of course when a global viral pandemic and its ongoing 737 MAX fiasco has sent its cash flow plunging to the most negative levels in decades.

Meanwhile, Blackstone’s private equity operation is the firm’s largest business by assets, at $183 billion, of which energy accounts for almost 10% of the total portfolio.

Blackstone won’t be the last as rival private equity firms – many of which have purchased shale companies in recent years funded with staggering levels of junk debt – also are weighing similar actions.

“From an economic perspective, the virus has created dislocation in the market and fear among the people,” Blackstone co-founder Stephen Schwarzman said in an interview in Mumbai last week. “Once that starts, one has to find the impact of negative consequences. But the turbulence can also have an upside for firms with a war chest, he said.

“It creates a substantial opportunity to buy assets and give credit.” Or, in the case of Blackstone’s portfolio companies, to take it.

The March 11, 2011, Fukushima nuclear incident in Japan made international headlines for months, but it also changed Japanese attitudes towards nuclear energy. As Statista’s Katharina Buchholz notes, after a devastating tsunami hit Japan on March 11, 2011, emergency generators cooling the Fukushima nuclear power plant gave out and caused a total of three nuclear meltdowns, explosions and the release of radioactive material into the surrounding areas.

Before the incident, the Japanese had been known as steadfast supporters of nuclear energy, taking previous nuclear catastrophes at Three Mile Island (USA) or Chernobyl (Ukraine) in stride. But a meltdown on their own soil changed the minds of many citizens and kicked the anti-nuclear power movement into gear.

After mass protests, the Japanese government under then Prime Minister Yoshihiko announced plans to make Japan nuclear free by 2030 and not to rebuild any of the damaged reactors. New Prime Minister Shinzo Abe has since tried to change the nation’s mind about nuclear energy by highlighting that the technology is indeed carbon neutral and well suited to reach emission goals.

You will find more infographics at Statista

Despite one reactor restart at Sendai power plant in Southern Japan in 2015, nuclear energy has almost vanished from Japanese electricity generation. In 2018 (latest available), only 6 percent of energy generated in Japan came from nuclear power plants. Coal and natural gas picked up most of the slack, but renewable sources, mainly solar energy, also grew after 2011.

Authored by John Vibes via TheMindUnleashed.com,

The FBI has spent months trying to get an interview with Prince Andrew about his relationship with Jeffrey Epstein, but investigators have had no luck getting him to speak on the record about the case.

New York prosecutors told the press this week that the prince has “completely shut the door” on cooperating with authorities. They are now considering what further legal action can be taken.

Andrew continues to deny any wrongdoing or knowledge of Epstein’s many crimes, despite a growing body of evidence indicating that he was involved.

Manhattan Attorney Geoffrey Berman described the prince as a “co-conspirator.”

“Contrary to Prince Andrew’s very public offer to cooperate with our investigation into Epstein’s co-conspirators, an offer that was conveyed via press release, Prince Andrew has now completely shut the door on voluntary cooperation and our office is considering its options,” Berman said, according to the Guardian.

Andrew has previously promised to help investigators with the case, but has since removed himself from public life. He has also refused requests for interviews that investigators have sent him.

When asked about the recent statement from New York prosecutors, a spokesperson for the palace told the Guardian, “The issue is being dealt with by the Duke of York’s legal team.”

Virginia Giuffre, one of the many girls trafficked by Jeffrey Epstein, has become one of his most outspoken victims. She has also accused the prince of raping her while she was underage. Giuffre has appeared on dozens of interviews with broadcasters around the world to share her story.

Andrew has made no public comments on the matter since promising to speak with investigators after his BBC interview where he made numerous claims that were later exposed as lies.

Most notably, the prince claimed that he never met Giuffre or even heard the name before. A leak of private emails where he mentioned Virginia Giuffre surfaced just days after the interview, proving his claims false.

During his BBC interview, Prince Andrew claimed that he was at a Pizza Express in Woking on the night Giuffre says he raped her after the pair visited a nightclub together. However, eyewitnesses have now come forward to support Giuffre’s claims about being at the club with him on the evening in question.

Andrew was also found in the flight logs of Epstein’s notorious private airplane, booked on flights that went to his property in the Virgin Islands, where the Attorney General for the territory has claimed that Epstein “held underage girls captive” as recently as 2018.

At the start of January, when the market euphoria was at an all time high, the blow off top meltup was raging and an army of millennial Robinhood daytraders was about to be unleashed (only to be crucified at the end of February), we first warned our readers that “Institutions, Retail And Algos Are Now All-In, Just As Buybacks Tumble.” In the markets, nobody noticed and the warning fell on deaf ears as the relentless melt up, which we called for what it was, namely a clear “distribution” from smart to dumb money – continued. 

Exactly two months and one bear market later, the first in 11 years, they finally noticed, with Bloomberg today writing that US companies, which until now were quite happy to sell some BBB-rated bonds and use the proceeds to buy stocks to prop up their stock price, have stepped back from repurchasing their shares even before the coronavirus outbreak (something we made quite clear in January).

Using a calculation by the permabulls over at Birinyi, Bloomberg reports that companies have announced $122 billion of share repurchases in January and February, which as we warned was the lowest in years and down 46% from a year ago for the biggest drop to start a year since 2009.

The numbers above fail to capture the crash in markets the followed the acute phase of Coronavirus pandemic, as well as the most recent oil plunge that has caused a plunge in oil prices and hammered all junk-bond funded companies. As such, Bloomberg’s reporters correctly point out that the “reduction underlines a concern that will get bigger should the virus inaugurate an age of prudence among corporate treasurers. Luxuries such as share repurchases, while showing signs of picking up amid the rout, are easy to cut when cash preservation and creditworthiness become the priorities.“

Which is not to say that companies do not buyback their stock when markets tumble: indeed during prior corrections, repurchases may have prevented equity losses from snowballing. For example, in the middle of the sell-off in May 2019, repurchases by BofA’s corporate clients surged 23% for the eighth-busiest week in a decade. The market bottomed on the first day of June. During the route in February 2018, the rebound in stocks came in a week when Goldman Sachs’s corporate-trading desk saw the most buyback orders ever.

This time however, with a global recession over the corner, it may be different. Indeed, with companies now rushing to draw down on revolvers in a liquidity procurement panic, the last thing they will be spending money on ahead of the recession is buybacks. In fact, one can argue that the main reason why we are now in a bear market and on the verge of a recession is because of companies such as Boeing, which until recently spent billions on buybacks; companies which are now drawing down on their revolvers.

“If they’re forced to use that for other areas of the business, you’ll lose some of that key support in the market,” said Mike Stritch, chief investment officer for BMO Wealth Management. “That’s a key underpinning for the stock market, and you do worry you’re going to see some companies folding up on this.”

That the disappearance of buybacks is a problem is an understatement: as we reported recently for the past decade, the only source of buying have been companies themselves, repurchasing their stock.

Ironically, while companies should have stopped repurchasing their stock a long time ago, buyback appetite remained strong in recent weeks, and in the final week of February, when the S&P 500 tumbled the most since 2008, Goldman’s corporate clients snapped up their own shares at the fastest rate in two years, with volume running at 2.3 times the average in 2019. Unfortunately, it now appears they used up much of their dry powder just as stocks were about to take another leg lower. 

In a perfect world, companies should maximize their buybacks at the lows and halt them at the highs, yet in the real world the opposite happens, even if there are plenty of experts who will tell you what “should” happen, experts such as Don Townswick, director of equity strategies at Conning, who told Bloomberg that “when your stock price is undervalued, buybacks become more attractive. At these levels in the marketplace, smart management is looking at this and thinking, ‘This is the time to actually realize those buybacks. We’re buying our stock 15% below where we thought it was.’”

Ah yes, but what Don is forgetting is that the bulk of buybacks in recent years was debt-funded, and unfortunately right now credit markets are slammed shut which means that companies have to rely on their own cashflow generation and cash balances to fund management’s favorite stock option boosting activity. There is just one problem: as we first reported last year, corporate America’s cash is draining at the fastest rate in decades, with balances at S&P 500 companies excluding financial firms plunging 15% in the past 12 months.

What’s worse is that the market now appears to be frontrunning the inability of companies to prop up their own stock prices, and is punishing those companies that have relied the most on buybacks. As Bloomberg notes, while the whole market is down more than 11% this year through yesterday, the S&P 500 Buyback Index that tracks stocks with the highest payout ratio has fared far worse, falling 19% this year.

Almost as if traders know that the golden goose, that propped up the market on so many occasions in the past, is now dead.

Authored by Chris Hamilton via Econimica blog,

I’m going to suggest that the Coronavirus is more a window or a marker that separates what will be seen as the end of an era and the beginning of another.  Corona-virus is serious, global, and appears it will cause significant death and disruption. 

But Coronavirus itself isn’t the problem (no more than Spanish Flu was in 1918/1919).  There is likely to be 9 to 18 months of global pandemic with large scale loss of life, but after the pandemic, things are more likely to return to “normal”.  And it’s the discussion of what is the “normal” we have seen over the past 7 decades versus the current and coming decades that I hope to spur.

To begin, the chart below shows the annual change in the under 60 year old US population (green line) versus annual change in 60+ year old US population (yellow line).  Also shown is annual US federal deficit split between public debt (red columns) and Intragovernmental (IG…blue columns representing Social Security, etc.), and lastly the federal funds rate (black line).  Simply, as population growth of the working age population slowed, first large scale legal and illegal immigration was utilized to maintain economic and financial growth. 

However, since 2008, working age population growth has rapidly decelerated and immigration slowed…and in their place have come interest rate cuts to zero and accompanying massive debt (I show federal debt below, but corporate debt has also binged of the nearly free money to buy their own stock and pay dividends).  2019 was the first year in US history the working-age population declined…and of course all net population growth now comes among the elderly.  The elderly who, on average, earn/spend half as much, are highly credit averse, and prefer to pay down existing mortgages and debt.

Changing gears but still tangentially, the weekly change in Federal Reserve holdings of US Treasury bonds (yellow columns) and the impact of that purchasing on the Wilshire 5000 (red line representing all publicly traded US equities).  Look again at the chart above of the fast decelerating growth of potential employees, potential consumers, potential stock purchasers among the working-age.  Consider the mandatory selling of the elderly…and then…

Consider the rationale and relationship for the Fed’s “activism”.

Broadening out to show the weekly change in Federal Reserve held mortgage backed securities (MBS…blue columns), Treasuries (yellow columns), and again the Wilshire 5000 (red line).

Again, consider the Fed’s motivation and the relationship of Fed buying and asset prices sky-rocketing.

Next, perhaps also worthy of some discussion is the Fed’s experiment to control interest rates via interest paid on excess reserves (IOER).  Just a reminder, prior to ’08, banks collectively held literally a few billion in excess reserves but in the ’09 GFC, the Fed stuffed them with excess reserves.  The excess reserves peaked just prior to the end of QE and began precipitously declining years prior to any balance sheet reductions by the Fed.  However, during that intermediate period while the Fed was raising the Federal Funds Rate, the Fed also raised the interest paid to the largest banks on those trillions in excess reserves.  Despite the fast rising, Fed sponsored, risk-free returns for lending no money, excess reserves plummeted.  What is so fascinating is that when the Fed felt compelled to begin cutting the FFR (and the IOER’s), reducing the returns on those excess reserves…the Fed also restarted QE (or “Not-QE”) and magically bank excess reserves ceased declining and began rising!?!  An increase in excess of $400 billion in Fed held Treasuries has coincided with a nearly $250 billion increase in excess reserves?!?

However, despite the $1.5 trillion in excess reserves, banks (and others) are oversubscribing Fed repo auctions at record levels…perhaps this is worthy of some discussion?

Next, consider the Fed’s holdings of US Treasuries by durations and the resultant impact on the spread of the 10 year Treasury minus the 2 year Treasury.  Prior to the GFC, the Fed conducted their policy rather banker like, in a rather boring fashion.  However, since the GFC, the Fed is spastically dumping one duration while pouring into another.

And a focus on the Fed’s holdings of short term US Treasury bills versus the yield on the 3 month Treasury bill.  Check out the action on the far right…and perhaps this is discussion worthy?  The Fed is currently buying every duration, but more than anything, is sucking up bills at an unprecedented rate?!? Uhhh!

Global

But now widen out and put all this into a global scope.  If we look at annual global working-age population growth (black dashed line below) split among the 1st world (blue line), Asia (excluding East Asia), and Africa (red line)…the picture of what is happening in the US makes a little more sense. 

The working-age population of the 1st world begins a secular decline as of 2020.  For those curious, the 1st world below is collectively including all of the Western Hemisphere, Europe, Oceania, Russia and Eastern Europe, plus East Asia (China, Japan, S/N Korea)).  The 1st world consumes 75% of all commodities, has over 80% of the income, and consumes even more of the global exports…this is the population that takes out over 90% of the credit.  And as for Africa and Asia (excluding East Asia), they are totally reliant on the first world growth to export their cheap labor, cheap commodities, and finished goods.  Without growth in the first world consumer base, these 2nd and 3rd world nations haven’t an oar in the water.

And all this was before any inclusion of a likely pandemic.  Now, disruption and dislocation is likely on top of 1st world working age depopulation.  Discuss.