Risks Out There 06 (May 20 - Dec 24)

[winston]

From Bad to Worse? Next Year’s Economic Risks Are Already Here

History says the Federal Reserve’s high-speed interest-rate hikes may well tip the US into recession in 2023. Few will be surprised if spiraling natural-gas prices do the same for Europe. The double whammy of Covid Zero and a property slump threatens to bring China’s economy to a near standstill.

And in an extreme downside scenario, all those things happen at once. That could wipe out some $5 trillion in global output, compared with more upbeat forecasts at the start of this year,

There are positive surprises that could stop the rot next year. The Fed might pull off the fabled soft landing with the labor market proving resilient. Warm weather could spare Europe a recession. China may opt for an early exit from lockdowns.

Source: Bloomberg

https://finance.yahoo.com/news/bad-wors ... 03548.html

[winston]

‘We see major stock markets plunging 25% from levels somewhat above today’s,’ Deutsche Bank says

by Vivien Lou Chen

A 25% decline in equities on the map, and they expect the U.S. to go into a recession by mid-2023.

Source: Market Watch

https://finance.yahoo.com/m/a07952c8-40 ... rkets.html

[winston]

Goldman: We don't like stocks here

by Brian Sozzi

"We remain relatively defensive for the three-month horizon with further headwinds from rising real yields likely and lingering growth uncertainty".

Overweight (have more exposure to) cash and credit in the near-term. The investment bank, which is underweight (have less exposure to) bonds and stocks, sees opportunities to "add risk" in 2023 — but the moment isn't now.

Source: Yahoo Finance

https://finance.yahoo.com/news/goldman- ... 32361.html

[behappyalways]

Blackstone to limit withdrawal on giant real estate fund

https://mobile.twitter.com/biancoresear ... 5939421185

[behappyalways]

Blackstone Urges Investment Advisors To 'Keep Clients Calm' As It Limits Redemptions Of Commercial REIT
https://www.zerohedge.com/markets/comme ... edemptions

Blackstone to limit withdrawal on giant real estate fund

https://mobile.twitter.com/biancoresear ... 5939421185

[winston]

BIS warns of US$80tn hidden FX swap debt

The churn of deals was almost US$5 trillion per day in April, two thirds of daily global FX turnover.

Source: Reuters

https://www.thestandard.com.hk/section- ... -swap-debt

[winston]

Market Risks to Watch Going Into 2023

by REBECCA MEZISTRANO

Fed's language after the December 15 decision that would indicate a hawkish tenor into 2023.

And clearly, we have to be looking at, of course, the economic headwinds that come from China. They come from Europe.

Source: The Street

https://www.thestreet.com/video/market- ... nto%2B2023

[behappyalways]

Another Blackstone Fund Just Hit Redemption Limits
https://www.zerohedge.com/markets/breit ... stone-fund

[behappyalways]

The Principal Market Worry Is Shifting From Inflation To Recession
https://www.zerohedge.com/markets/princ ... -recession

[behappyalways]

There is a second plausible theory: this year’s aggressive Fed tightening has generated substantial losses on banks’ securities portfolios. As reflected in AOCI, where changes in the market value of bonds in AFS portfolios are captured, US banks have cumulatively lost ~$770bn YTD (Exhibit 5). These losses, while unrealized, have significantly reduced banks’ equity, and in some cases reduced to a level such that tangible common equity has fallen into negative territory. This is the case particularly among smaller banks. Based on S&P data, JPMorgan found that ~30 banks, most of which have total assets of <$1bn, reported negative tangible common equity as of 3Q22, an increase from 11 banks in 2Q22, and 0 banks in 1Q22.

Spike In Fed Discount Window Usage Hints At Looming Bank Crisis
https://www.zerohedge.com/markets/spike ... ank-crisis