tyb's
IMF Prepares $1 Trillion Bazooka
The IMF has just fired off a trillion-dollar "bazooka" of its own Monday morning. In a blog post published minutes ago, IMF Director Kristalina Georgieva issued three "policy prescriptions" that she said should define a "coordinated response" from the developed economies in Europe and the US. In addition to declaring that the IMF has $1 trillion in loan capacity ready to put to work to salve the economic damage caused by the outbreak, Georgieva encouraged governments to spend more, and asked the Fed to consider bulking up its dollar FX swap lines to emerging-market central banks. She also noted that the $42 billion that investors have pulled from EM markets is one of the biggest outflows in history, and will certainly ratchet up financial stressors.
Read the full post below:
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Today, the IMF published a set of policy recommendations that can help guide countries in the difficult days ahead.
What more needs to be done?
Three action areas for the global economy:
First, fiscal.
Additional fiscal stimulus will be necessary to prevent long-lasting economic damage.
Fiscal measures already announced are being deployed on a range of policies that immediately prioritize health spending and those in need. We know that comprehensive containment measures—combined with early monitoring—will slow the rate of infection and the spread of the virus.
Governments should continue and expand these efforts to reach the most-affected people and businesses—with policies including increased paid sick leave and targeted tax relief.
Beyond these positive individual country actions, as the virus spreads, the case for a coordinated and synchronized global fiscal stimulus is becoming stronger by the hour.
During the Global Financial Crisis (GFC), for example, fiscal stimulus by the G20 amounted to about 2 percent of GDP, or over $900 billion in today’s money, in 2009 alone. So, there is a lot more work to do.
Second, monetary policy.
In advanced economies, central banks should continue to support demand and boost confidence by easing financial conditions and ensuring the flow of credit to the real economy. For example, the U.S. Federal Reserve just announced further interest rate cuts, asset purchases, forward guidance and a drop in reserve requirements.
Policy steps that we know have worked before—including during the GFC—are on the table. Yesterday, major central banks took decisive coordinated action on monetary easing and opening of swap lines to lessen global financial market stresses.
Going forward, there may be a need for swap lines to emerging market economies.
As the Institute for International Finance said last week, investors have removed nearly $42 billion from emerging markets since the beginning of the crisis. This is the largest outflow they have ever recorded.
So central banks’ policy action in emerging-market and developing economies will need to balance the especially difficult challenge of addressing capital flow reversals and commodity shocks. In times of crisis such as at present, foreign exchange interventions and capital flow management measures can usefully complement interest rate and other monetary policy actions.
Third, the regulatory response.
Financial system supervisors should aim to maintain the balance between preserving financial stability, maintaining banking system soundness and sustaining economic activity.
This crisis will stress test whether the changes made in the wake of the financial crisis will serve their purpose.
Banks should be encouraged to use flexibility in existing regulations, for example by using their capital and liquidity buffers, and undertake renegotiation of loan terms for stressed borrowers. Risk disclosure and clear communication of supervisory expectations will also be essential for markets to function properly in the period ahead.
All this work—from monetary to fiscal to regulatory—is most effective when done cooperatively.
Indeed, IMF staff research shows that changes in spending, for example, have a multiplier effect when countries act together.
What the IMF can do
The IMF stands ready to mobilize its $1 trillion lending capacity to help our membership. As a first line of defense, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit to help countries with urgent balance-of-payment needs.
rest at link
https://www.zerohedge.com/geopolitical/imf-prepares-1-trillion-bazooka
Boeing Among Travel-Related Firms Tapping $18 Billion Lifelines
Closed borders, travel bans and canceled vacations have sent aircraft companies such as Boeing Co. rushing to draw on emergency credit lines or arrange new short-term financing as the pandemic rages.
Last week, planemakers and leasing companies including Air Lease Corp. and AerCap Holdings tapped at least $18 billion in loans and revolving credit facilities – a kind of corporate overdraft – in the face of an unprecedented downturn for the travel history.
-Boeing had already used half of a $13.8 billion short-term loan as it battled with the Max jetliner crisis, and drew on the rest as the virus turned into a pandemic
-Most U.S. airlines have either raised new term loans or drawn on revolving facilities which were largely untouched until the coronavirus hit
-Air France-KLM is the only European airline to have said that it’s turned to a revolving loan to date
These are last week’s top corporate borrowers from the travel sector
Borrower Rating
Boeing Drew down $13.8b term loan Baa1/A-/A-
Air Lease Corp. Drew down part of $6b revolver BBB
AerCap Holdings Drew down $4b revolver Baa3/BBB/BBB-
United Airlines New $2b 364-day term loan Ba2/BB/BB
Hilton Worldwide Drew down $1.75b loan Ba1
Air France-KLM Drew down EU1.1b ($1.2b) revolver
Wynn Resorts Drew down part of $850m revolver BB
Norwegian Cruise Line New $675m revolver
Royal Caribbean Cruises Increase revolver by $550m, to improve liquidity further by at least $1.7b in 2020 Baa2/BBB-
Alaska Air Drew down $388m from 2 facilities BB+/BBB-
https://www.bloomberg.com//news/articles/2020-03-16/boeing-among-travel-related-firms-tapping-18-billion-lifelines
It is meaningful because a normal person can walk in a shop and realize this. The mechanism of how it arrives at it is what you are talking about.
> Been on hold with e-trade for 10 minutes and getting worried.
Let it, and yourself cool down. It will be shut off shortly after it opens as futures have been limit down since last night.
I hear you. They are all slammed with phone calls at this point. Good luck
dude… put the ego to the side. You have some knowledge, the problem is that you are trying to be all things to all people. You are missing the point and speaking to what you want the OP to be.. Get some humility.