Stock market crashes

Wall Street Journal and Realtor.com® Release Summer 2021 Emerging Housing Markets Index Report

Retrieved on:

Tuesday, July 20, 2021

Financial data vendors, Dow Jones & Company, Bazaars, Marketplace, The Wall Street Journal, Dow Jones, American journalism, Pulitzer Prizes, Mass media in the United States, Stock market crashes

Smaller Markets Continue to Rank Well: Similar to last quarter, the top 20 emerging housing markets list is dominated by smaller markets.

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Smaller Markets Continue to Rank Well: Similar to last quarter, the top 20 emerging housing markets list is dominated by smaller markets.
Markets Falling Out of the Top-20: In general, the markets that fell out of the top 20 didnt fall far.
The Wall Street Journal is a global news organization that provides leading news, information, commentary and analysis.
Published by Dow Jones, The Wall Street Journal engages readers across print, digital, mobile, social, and video.

Bank of America Finds 60% of Small Business Owners Expect their Revenue to Increase This Year, a Significant Rebound since Last Fall

Retrieved on:

Tuesday, May 11, 2021

Small business, Banking, Professional services, Finance, Economic impact of the COVID-19 pandemic, Economic history, New York Stock Exchange, Economy, Bank of America, Finance, Stock market crashes, Economy of the United States

Concerns that have declined significantly from last fall include the coronavirus pandemic (55%, down from 75% in fall 2020) and consumer spending (46%, down from 56% in fall 2020).

Key Points:

Concerns that have declined significantly from last fall include the coronavirus pandemic (55%, down from 75% in fall 2020) and consumer spending (46%, down from 56% in fall 2020).
Bank of America has already allocated $350 million to these four key areas across 91 U.S. markets and globally.
Bank of America offers industry leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services.
Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.\n'

IBC Reports Strong First Quarter 2021 Earnings

Retrieved on:

Thursday, May 6, 2021

Banking, Professional services, Finance, Banking, Stock market crashes

Economic conditions during the first quarter of 2021 have stabilized and in certain segments, slightly improved.

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Economic conditions during the first quarter of 2021 have stabilized and in certain segments, slightly improved.
The slight improvement in forecasted economic conditions positively impacted our ACL calculation in the first quarter, resulting in lower credit loss expense compared to the first quarter of 2020.
We continue to be confident in our exceptionally strong capital position, significant liquidity, and strong relationship deposit base.
Total net loans were approximately $7.4 billion at March 31, 2021 and Dec. 31, 2020.

Mid Penn Bank Originates Over $1 Billion in PPP Loans Helping to Save Over 89,000 Jobs

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Wednesday, May 5, 2021

Bank, Economic history of Italy, Economy, Financial crises, Stock market crashes

The Small Business Administration backed loans received by these employers has allowed them to retain more than 34,000 workers on their payrolls.

Key Points:

The Small Business Administration backed loans received by these employers has allowed them to retain more than 34,000 workers on their payrolls.
Through both the 2020 and 2021 programs, Mid Penn Bank has funded more than 7,400 loans for over $1.0 billion.\n\xe2\x80\x9cThis unprecedented program has been a critical component of sustaining the economies in the markets we serve.
Mid Penn Bank operates retail locations throughout the state of Pennsylvania and has total assets of $3 billion.
To learn more about Mid Penn Bank, visit www.midpennbank.com .\n'

Isabel Schnabel: Interview with Der Spiegel

Retrieved on:

Saturday, April 10, 2021

Economy, Currency, Economic history, Cryptocurrencies, Digital currencies, Stock market crashes, Economic bubbles, Euro, Bitcoin, Financial crisis of 2007–2008, Financial risk, Hedge

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Tim Bartz and Stefan Kaiser on 1 April and published on 9 April 2021, in print on 10 April 2021In the United States, the cyclically adjusted price/earnings ratio is now higher than it was before the financial crisis of 2008.

Key Points:

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Tim Bartz and Stefan Kaiser on 1 April and published on 9 April 2021, in print on 10 April 2021

In the United States, the cyclically adjusted price/earnings ratio is now higher than it was before the financial crisis of 2008.
Have equity and real estate prices reached such heights again that they are bound to implode at some point?
The collapse of the US hedge fund Archegos has just generated multi-billion losses for large banks such as Credit Suisse and Nomura.
There is a need to scrutinise the reasons why the banks enabled the fund to leverage up to such an extent.
The institutions thought that their loans were collateralised by the equity stakes held by Archegos.
But as the fund was forced to sell these stakes quickly and the prices were plummeting, the collateral was no longer worth much.
We can be glad that the effect has been limited to just a few players.
That sounds as if the financial sectors avoidance of more serious consequences was more down to luck than good judgement.
It is thanks to regulation that the banks have sufficient capital to cushion losses of that nature.
But more is to be done when it comes to funds, because their regulation is predominantly geared towards protecting investors.
Nonetheless, it is a warning signal that there are considerable systemic risks that need to be better regulated.
Are you worried about the prospect of a new, hitherto unregulated currency emerging alongside the euro, dollar and the like?
In our view it is wrong to describe bitcoin as a currency, because it does not fulfil the basic properties of money.
What really matters, though, is that the European economy takes off again, in which case the debt will also be manageable.
All decision-makers, and that includes the ECB, need to ask themselves what they can contribute within their respective mandates.
First, climate change has a massive impact on the economy, due to natural disasters for instance, and hence also on price stability.
And second, the ECBs mandate requires it to support the EUs economic policy, in which climate protection plays a leading role.

SHAREHOLDER ALERT: Lowey Dannenberg, P.C., Investigates Claims on Behalf of Investors of Vroom Inc. (VRM) and Encourages Investors to Contact the Firm

Retrieved on:

Wednesday, April 7, 2021

Vroom, Stock market crashes, Companies, Websites, Share trading, Stock market

On March 3, 2021, after the market closed, Vroom announced its fourth quarter and full year 2020 financial results in a press release.

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On March 3, 2021, after the market closed, Vroom announced its fourth quarter and full year 2020 financial results in a press release.
Vroom also reported that for the fourth quarter, its "[n]et loss increased 41.9% to $60.7 million."
On this news, the Company's stock price fell as much as $13.24, or 30%, during intraday trading on March 4, 2021.
The firm has significant experience in prosecuting multi-million-dollar lawsuits and has previously recovered billions of dollars on behalf of investors.

Industrial Info Project Spending Index Registers Year-Over-Year Gain for Second Month in a Row, an Industrial Info News Alert

Retrieved on:

Friday, March 19, 2021

Economic impact of the COVID-19 pandemic, Stock market crashes

For the second month in a row, Industrial Info's North America Industrial Project Spending Index , which measures the value of all active projects in the pipeline for the year, registered a year-over-year gain.

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For the second month in a row, Industrial Info's North America Industrial Project Spending Index , which measures the value of all active projects in the pipeline for the year, registered a year-over-year gain.
In comparison, the index registered only one positive month (January) in 2020, before the floor dropped out from under several markets amid the COVID-19 pandemic.
The Industrial Manufacturing Industry reported the biggest gain, up $39.14 billion, or 32% over spending in February 2020.
Oil & Gas Production saw a substantial year-over-year project spending increase, rising 25.7% to $100.76 billion last month, according to the spending index.

Speech of Eurogroup President, Paschal Donohoe, at the European Parliamentary Week, 22 February 2021

Retrieved on:

Tuesday, February 23, 2021

European Union, Economy of the European Union, Eurozone, Europe, Fiscal policy, Stock market crashes, European debt crisis, Keynesian resurgence

Thank you very much for inviting me to the Economic and Monetary Affairs Committee meeting of this Interparliamentary Conference on Stability, Economic Coordination and Governance in the EU.

Key Points:

Thank you very much for inviting me to the Economic and Monetary Affairs Committee meeting of this Interparliamentary Conference on Stability, Economic Coordination and Governance in the EU.
It is an honour to participate in this important forum.
I am grateful to the European Parliament and the Portuguese Presidency of the EU for having organised a timely discussion on this very important topic.

Economic outlook - setting the scene

I would like to set the scene and say a few words on the economic situation.
The Commission's 2021 Winter Forecast confirmed that the Covid-19 crisis caused economic activity in the euro area to contract in 2020 by an unprecedented 6.8%.
It goes without saying that without the swift and bold policy response by the member states and the European institutions, things would have been even worse.
At the same time, we need to be mindful that the positive economic outlook faces elevated uncertainty and is predicated on a positive public health situation.
It is against this background that we have to consider the fiscal-economic policy mix going forward.

Fiscal policy strategy

Let us start with fiscal policy, which played a crucial role in limiting the socio-economic fallout from the crisis by protecting incomes and jobs.
There is an international consensus that at least this year, fiscal policy needs to remain expansionary to ensure that a solid recovery indeed takes hold.
We should proceed cautiously to avoid cliff-edge effects related to the risk of a premature withdrawal of fiscal stimulus.
At the same time, we have to plan ahead and start thinking about the fiscal stance in 2022 and beyond.
I took good note of what President Christine Lagarde said recently when she presented the ECB's Annual Report to the European Parliament: monetary and fiscal policy should continue to work hand in hand.
Member states coordinated fiscal policy in the crisis, and this reinforced the credibility of the EU's crisis response.

Priorities for fiscal and economic policies

Maintaining emergency economic support

Rebalancing fiscal support

As we look into the future and the recovery starts to take hold, our second priority will be to gradually shift towards more targeted fiscal support measures.
We are very aware that some sectors and citizens are hit harder by this pandemic.
There will likely be a need to continue providing them with emergency support for longer.

Rebuilding the economy: investment and reforms

This will require ambitious investment and reforms.
This is why member states should take advantage of the current favourable financing conditions and of course the Next Generation EU programme, to increase investment in infrastructure and human capital.
To maximize public investment in the economy and make it a catalyst for private investment, public investment needs to be accompanied by structural reforms that will foster sustainable growth.
These include reforms to improve the functioning of labour and product markets, the public administration, and thereby also the business environment, which is key for spurring innovation.
The Recovery and Resilience Facility, the centrepiece of Next Generation EU which entered into force last week, will give impetus to the much needed investment and reform effort.

Conclusion

This brings me to the conclusion of my remarks.
The pandemic plunged our societies and economies into an unprecedented crisis, which, I am confident, we will overcome.
The outlook is improving, but we have a journey to complete.
There is a lot at stake and we owe it to our citizens to get it right.

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Fraser Institute News Release: Canada’s economic performance heading into COVID recession was weakest of last five pre-recession periods

Retrieved on:

Thursday, February 11, 2021

Recessions, Economy, Articles, Business cycle, Unemployment, Macroeconomics, COVID-19 recession, Stock market crashes, Recession shapes, Great Recession in the United States

Canadas economy, whether measured by growth in income or business investment, or the strength of our labour markets, was the weakest in the four years (2016-19) leading up to the COVID-recession relative to the four previous comparative periods, said Jason Clemens, executive vice president of the Fraser Institute and co-author of Comparing Economic Performance in Five Pre-recession Periods .

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Canadas economy, whether measured by growth in income or business investment, or the strength of our labour markets, was the weakest in the four years (2016-19) leading up to the COVID-recession relative to the four previous comparative periods, said Jason Clemens, executive vice president of the Fraser Institute and co-author of Comparing Economic Performance in Five Pre-recession Periods .
The study compares numerous economic indicators relating to income growth, labour markets and business investment for the last five pre-recessionary periods: 1986-1989, 1997-2000, 2005-2008, 2011-2014, and 2016-2019.
On almost all of the measures included in the analysis, the economic performance from 2016 to 2019 (the years preceding the COVID-19 recession) was the weakest.
The evidence is clearCanadas economy was weaker heading into the COVID-19 recession than it was during the years preceding the last four recessions or economic slowdowns, Clemens said.

Isabel Schnabel: The sovereign-bank-corporate nexus – virtuous or vicious?

Retrieved on:

Friday, January 29, 2021

Economy, Articles, Economic bubbles, Finance, Systemic risk, Stock market crashes, Euro, Banking union, Government debt, Financial crisis of 2007–2008, Global financial system, Financial crisis

SPEECHThe sovereign-bank-corporate nexus – virtuous or vicious?Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the LSE conference on “Financial Cycles, Risk, Macroeconomic Causes and Consequences”[1] Without the forceful responses of fiscal, monetary and prudential authorities the economic and social costs of this crisis would have been significantly higher.

Key Points:

SPEECH

The sovereign-bank-corporate nexus – virtuous or vicious?

Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the LSE conference on “Financial Cycles, Risk, Macroeconomic Causes and Consequences”

[1] Without the forceful responses of fiscal, monetary and prudential authorities the economic and social costs of this crisis would have been significantly higher.
Governments, in particular, have stabilised aggregate demand and incomes by absorbing economic and financial risks of the private sector as the crisis unfolded.
Through the generous issuance of guarantee schemes, governments secured a continuous flow of credit to firms, which supported economic growth and protected financial stability.
As a consequence, the policy response to the pandemic has visibly intensified the interdependencies between sovereigns, banks and firms.

A virtuous circle between sovereigns, banks and corporates

At the same time, the ECB supported bank lending to firms by providing ample liquidity at favourable conditions, while prudential authorities took comprehensive supervisory relief measures.
The decisive policy response allowed firms to draw down their credit lines in order to finance their working capital, leading to an unprecedented increase in bank lending in the spring of 2020.
Chart 2 Loan guarantees and remaining envelopes relative to sovereign debt in 2020 in selected euro area countries Percentages of GDP and percentages of outstanding sovereign debt

Together, these measures helped prevent an abrupt contraction of credit to firms and a wave of corporate defaults, and protected banks profitability and balance sheets.
Thereby, they created a virtuous circle between sovereigns, banks and corporates (Chart 3).
Chart 3 A virtuous circle between sovereigns, banks and corporates

At the same time, the pandemic sparked a marked increase in both sovereign and corporate debt levels (Chart 4). Chart 4 Indebtedness of the general government and the non-financial corporate sector across the euro area percentages of GDP

In addition to rising debt levels, the interlinkages between sovereigns, banks and firms resulting from the broad-based fiscal support have grown.
[4] On the other hand, banks and corporates have become more dependent on government support.
[5] Chart 5 Bank lending to euro area non-financial corporations and bank credit standards Annual percentage changes; weighted index

The sovereign-bank-corporate nexus – this time is different

Most notably, this time, the crisis did not originate in the financial sector, as in the global financial crisis[6], but in the real economy, and public support was granted to firms, not banks.
Moreover, the pandemic has not raised concerns of moral hazard.
At the same time, with the Banking Union still incomplete, the pandemic has once again exposed old vulnerabilities.
[7] Chart 6 Euro area bank exposures to domestic sovereign debt securities relative to total assets Jan. 2007-Sep. 2020, observed; end-2022, potential; percentage of total assets

In fact, bank and sovereign credit ratings remain highly correlated in the euro area (Chart 7).[8] Chart 7 Issuer ratings of sovereigns and banks in the euro area Rating buckets

Given that corporate health has become more dependent on the domestic sovereigns fiscal support, the withdrawal of government support could lead to cliff effects, giving rise to financial instabilities.
[9] It could trigger corporate defaults, a rapid rise in non-performing loans (NPLs) and tighter financing conditions.
Chart 8 A vicious circle between sovereigns, banks and corporates

Policy implications of the sovereign-bank-corporate nexus

First, it depends on the effectiveness of the wide-ranging policy support that is currently in place.
Despite generally stronger interdependencies, the extent to which these might give rise to challenges in the future differs across the euro area.
Banks in more highly indebted countries also tend to exhibit higher domestic sovereign exposures and higher corporate NPL ratios.
To a large extent, this reflects unresolved legacy issues with respect to the banking sector and sovereign indebtedness (Chart9).
Chart 9 Banks domestic government bond holdings and corporate NPL ratios across the euro area x-axis: percentage of total assets, y-axis: percentage of total corporate loans

The asymmetric impact of the pandemic on different industries has exacerbated prevailing vulnerabilities.
Countries with high sovereign debt levels are also those that are more dependent on industries hardest hit by the pandemic, such as tourism, resulting in a larger drop in corporate profits (Chart 10).
Chart 10 Non-financial corporate profits by sovereign indebtedness index Q4 2019 = 100 Sources: European Commission (AMECO database) and ECB calculations.

The Next Generation EU instrument helps alleviate potential strains on national fiscal space, thereby partly decoupling corporate financing conditions from the fiscal space of their respective sovereigns and directly attenuating the sovereign-bank-corporate nexus.
From the viewpoint of monetary policy, the potential emergence of an adverse macro-financial feedback loop between sovereigns, banks and corporates would matter for at least two reasons.
First, it could measurably slow down the return of inflation to our medium-term aim.
Increasing corporate defaults through a premature withdrawal of fiscal support would deepen the contraction in output and, ultimately, exert additional disinflationary pressures.
Second, there is a risk that the sovereign-bank-corporate nexus could impair the smooth transmission of monetary policy through financial instabilities, a credit crunch and self-fulfilling price spirals.
It significantly mitigates the risks of a sudden repricing and of self-fulfilling price spirals that threatened to impair the transmission of our policy in March last year.
As President Lagarde highlighted last week, this requires the Eurosystem to maintain a strong presence in euro area bond markets.