Daily Briefing – May 11, 2020

Published on
May 11th, 2020
34 minutes

Daily Briefing – May 11, 2020

Daily Briefing ·
Featuring Jack Farley, Ash Bennington, and Ed Harrison

Published on: May 11th, 2020 • Duration: 34 minutes

Real Vision's Ash Bennington and Managing Editor Ed Harrison discuss Raoul's Expert View, "Global Recession - What's Next?", which was released today. Bennington and Harrison then take a deep dive into the real economy with a special focus on the risks posed by debt deflation. The pair also talk about the reopening of the global economy with an eye toward recent events in Germany. In the intro, Jack Farley looks at a dramatic new chapter in the WeWork saga.



  • CR
    Chris R.
    12 May 2020 @ 21:33
    The Transcript is not working for me. No PDF comes up... Still works for Raoul's interview with Kyle Bass
    • jc
      jonathan c.
      18 May 2020 @ 07:57
      Same here - PDF transcript not working on desktop nor on ipad
  • TS
    Thomas S.
    12 May 2020 @ 02:06
    FYI the anti-body test has been shown to be horribly inaccurate whereas the nasal test is very accurate
    • UJ
      Ulf J.
      12 May 2020 @ 07:11
      Test kit can we trust them, https://nypost.com/2020/05/06/faulty-coronavirus-kits-suspected-as-goat-and-fruit-test-positive-in-tanzania/
    • MT
      Mike T.
      13 May 2020 @ 10:15
      **THE** antibody test as in there's just one?? Do a search on MOLOGIC.co.uk They have developed a antigen/antibody home test kit providing results in 10 mins. Moving rapidly through international peer review/approval process. Will be ready for mass production beginning of June.
  • BE
    Brent E.
    12 May 2020 @ 01:06
    Why do I never hear anyone in America talk about the fact that the USA has about 4% of the world's population, and nearly 30% of the world's cases of the disease. You need to take a hard look at how you are running your country.
    • EK
      Edward K.
      13 May 2020 @ 02:13
      World's "recorded cases." I agree with the second statement.
  • AG
    Alan G.
    13 May 2020 @ 00:57
    Missing from the discussion is the business debt service, that is Ebitda or Ebit / Interest or interest in principal payments, One of the reason, I believe that we have seen such growth in corporate debt is that the cost of debt has fallen along with the treasury of course. Part of the triple BBB metric is Total Debt to Ebitda but no one seems to discuss or write much about debt service. I understand this in the case of refinancing at higher rates. I strongly believe that the FED no matter what will engineer low-interest rates and maybe even create an interest rate suppression to force inflation to monetize debt. they certainly did this after WW2. Although we also had the benefit of population growth that unless we allow immigration will be a big problem for the US. Just for a curious point the Williams Company a BBB company that has 4.4x debt to Ebitda ratio just issued a 30 year $1.0 billion bond with an interest rate of 3.5%. The actual issue price was 99.495%, so the yield is really 3.66%. The point with this and not to argue but all BBB are not the same and still, I do agree there will be a lot of debt deflation. Below someone added a comment about the comparison of the JGB and total Japan private sector debt to GDP. I will repeat my comment below here. If I remember correctly, much of the increase JGB debt to GDP in Japan is because the private debt to GDP is very low (a saving and older population-based society) thus the government needs to issue the debt to avoid GDP declines. It also helps greatly that Japan is a net exporter and that on only 12% of the JGB is held out of the country while in the US it is over 40%. This is a big problem for the US if US ever loses the dominant reserve currency status Sorry for being so long-winded
  • DS
    David S.
    12 May 2020 @ 01:53
    Japan’s national debt as a percent of GDP is expected to reach about 250% at the end of 2020. It is simply misleading to comparing Japanese national debt percentage to GDP to the expected US national debt as a percentage to GDP which is expected to be about 110%. In one of Mr. Koo's presentations on RVTV he mentioned that the corporate sector drastically reduced corporate debt over a ten-year period while Japan was increasing its national debt. In America and elsewhere many CEOs increased debt to buy back stock to increase executive compensation without increasing net profits of the companies. In addition, the Japanese household debt is low and the Japanese household savings is high compared to the West. It would be interesting to see an apples to apples comparison with US debt, US corporate debt and US household debt. It would be a much different picture. DLS
    • JF
      Jack F. | Real Vision
      12 May 2020 @ 02:27
      Hi David, it sounds like you're really going to like Ed talk with Richard Koo on Wednesday. It's a fantastic conversation, and Mr. Koo has some of the best charts I've ever seen. I hope you enjoy it. Thanks for your comment and stay safe. -Jack
    • DS
      David S.
      12 May 2020 @ 16:15
      Jack F. - I am looking forward to Mr. Koo's interview. RVTV viewers if you have time you should review Mr. Koo's RVTV former interviews and other presentations. I am interested especially about his ideas on saving the Euroland. DLS
    • AG
      Alan G.
      13 May 2020 @ 00:28
      I totally agree with this point. If I remember correctly, much of the increase JGB debt to GDP in Japan is because the private debt to GDP is very low (a saving and older population-based society) thus the government needs to issue the debt to avoid GDP declines. It also helps greatly that Japan is a net exporter and that on only 12% of the JGB is held out of the country while in the US it is over 40%. This is a big problem for US if US ever loses the dominant reserve currency status.
  • JF
    John F.
    12 May 2020 @ 21:33
    I really appreciate the story about your father’s doctor, Ash, and how it relates to lives vs the economy debate. I would gladly hand over my wealth to get my brother back who died from this punishing disease just last month; a loss that others don’t relate to because the suffering is happening to someone else. If I have to stay inside for another month or two or even three, knowing Im saving lives then so be it - glad to contribute to all lives that matter.
  • JF
    John F.
    12 May 2020 @ 21:01
    Great stuff all around. Sorry about the computer crash Ash but the new angle is a better framing for you. The blue glare in your glasses from your other device is gone and the view is more natural.
  • DS
    David S.
    12 May 2020 @ 02:20
    Mr. Harrison - Great information on the R naught factor in Germany changing from a low of 0.65 to 1.13 after opening. This is the first information I have seen. As we open we know there will be a difference in the spread of the virus. It is a price that many will have to risk to keep their families in food and shelter. Everyone needs to be as safe as they can be. We need better treatments ASAP, but before the Fall for sure. DLS
    • FD
      Frank D.
      12 May 2020 @ 09:46
      Try this, updated daily. Data from the Robert Koch Institute. German/English https://www.rki.de/DE/Content/InfAZ/N/Neuartiges_Coronavirus/Situationsberichte/Gesamt.html
    • DS
      David S.
      12 May 2020 @ 16:07
      Frank D.- Thanks. DLS
  • DS
    David S.
    12 May 2020 @ 15:40
    "Stock prices have reached what looks like a permanently high plateau." Irving Fisher, October 21 1929 DCS
  • PH
    Petter H.
    12 May 2020 @ 15:17
    Ed. As a swede I have to say that your pronunciation of "Dagens Nyheter" is splendid. This will be a daily briefing I will return to.
  • TZ
    Tibor Z.
    12 May 2020 @ 14:15
    How a debt jubilee would effect the global stock market? I think it would worth a video or even a week series, walking us through the steps and knock on effects! This event is definitely in the cards. Just look at European countries. Non of them can print their own money and the ECB's hand is right. At least up till now.
  • JD
    James D.
    11 May 2020 @ 23:31
    I would love to hear a discussion about the bond market versus the stock market. Which is right and why?
    • MT
      Mark T.
      11 May 2020 @ 23:51
      I believe Raoul discussed this today in the first segment of the series on the global recession. If memory serves me he trusts the bond market, saying those folks always have it right.
    • KM
      Karan M.
      12 May 2020 @ 12:27
      Contrarian view here as well from Santoli: https://www.cnbc.com/2020/05/09/can-stocks-and-bonds-both-be-right-making-sense-of-rising-equities-and-ultra-low-treasury-yields.html
  • RM
    Russell M.
    12 May 2020 @ 03:38
    Don’t cry Ash. So you fried your computer with excessive porn surfing in the virus lockdown. These things happen. Best thing to do is try to spend some time each day in productive activity.
    • WN
      Wubbo N.
      12 May 2020 @ 11:21
      Lol guys it was a joke.
  • PB
    Patrick B.
    12 May 2020 @ 08:41
    How can Iceland be back to 95% without tourism?
    • EH
      Edward H. | Real Vision
      12 May 2020 @ 10:51
      Minus the tourism. I misspoke on that. That is a big part of their economy in the summer
  • AV
    Anthony V.
    12 May 2020 @ 10:03
    My view is that there is much questionable information on this virus, most hospitals and clinics are closed so sick people are concentrated in smaller pool of health facilities. Constant fear fed by media doesn't help our health, and after 2 months of lockdown people are unfit and disconnected from normal interaction with everyday bacteria and viruses that teach our immunity. The deaths rates of the virus. properly assessed needs to be compared to death rates from the lockdown side effects which will last well beyond the health crisis.
  • DR
    Derrick R.
    12 May 2020 @ 02:46
    “Best of luck to you” - Jack Epic!!!
    • JF
      Jack F. | Real Vision
      12 May 2020 @ 04:05
      Hah got to have fun with it, right?
  • RS
    Roger S.
    12 May 2020 @ 03:30
    Ash the replacement computer actually has better sound than the old one, less echo. Although you face has become rather large. lol
  • Am
    Alex m.
    12 May 2020 @ 03:21
    Ash - its more engaging with your camera lower, as per this interview. With your normal set you are not looking at the camera.
  • MT
    Mark T.
    11 May 2020 @ 22:45
    It's sad that people are dying from covid19, to be sure. I'm gathering that on top of what Ash spoke of, there is frustration in the blunt manner in which it's being dealt with and the changing narrative. Stay home to flatten the curve... okay. Now, stay home so nobody gets infected? That's just not possible. If we had competent leadership, and here is the frustration, we could approach this more surgically and protect the people who are really at risk and let the ones who aren't at risk, the vast majority of cases who's symptoms are mild or non-existent, carry on. Now, I have no idea why people with guns are entering state capitals and calling governors tyrants, that is just crazy sauce. These folks just don't understand the meaning of the word tyranny. When I think of tyranny, I think of Putin pushing dissenters out of 10 story apartment building windows.
    • CB
      C B.
      11 May 2020 @ 23:13
      While I agree with you, I think you underestimate the financial distress that many are feeling. We know the average American does not have enough savings to sustain a minor medical emergency. So when this hits and those reserves are quickly exhausted, people start to feel desperate. This doesn't excuse dangerous and incendiary behavior like waving guns in the street. But it does illustrate the other side of the "shut it all down" tradeoff.
    • PB
      PHILLIP B.
      11 May 2020 @ 23:27
      On a positive note, presumably we will take learnings away from this first wave that we can apply toward the second wave, should one occur. Examples would be to isolate the vulnerable, immediately cease air travel to and from destinations that experience a boom in cases. Then there are the stockpiles of PPE that would make sense to have (if we can catch up). To your point on tyranny, let's hope a learning is for there to be more transparency and granularity about where cases are occurring and the demographics of the cases. Sadly, a learning for the second wave is that we should not anticipate federal government leadership beyond what is necessary to somewhat coordinate large actions, e.g., shutting down passenger traffic at airports.
    • SB
      Shadi B.
      11 May 2020 @ 23:40
      When it comes to the united states, my biggest concern in regards to the inevitable second wave/s and smaller/local outbreaks is that the capacity to contain such outbreaks will depend on a swift and coordinated response, that's usually led by the local/city/state public health departments. This response should include local quarantining measures, robust contact tracing, and readily accessible point-of-care testing. While there might be some success stories here and there, it's very likely that the response to the second wave of outbreaks will be chaotic and poorly coordinated (just like in the first round); leading to the potential need for rolling state-wide or regional lock-downs. Considering that we are already walking on thin ice; a second/rolling lock-down (especially if it involves a large metro or two, or a large state (by economic standars) like CA) will be a very serious blow and will deepen the psychological and economic impacts that we've seen so far.
    • AB
      Alastair B.
      12 May 2020 @ 03:13
      Do you have any evidence to support your Putin claim?
  • JD
    John D.
    12 May 2020 @ 01:36
    Ash Bennington can't help but reveal his prejudice through his generalisations.
  • CB
    Clifford B.
    12 May 2020 @ 01:18
    Been following the covid situation fairly closely and have come to the point that it cannot be stopped, so what do we do? Stay at home waiting for a vaccine that may never come to fruition? Probably not. Granted we are all primarily here for economic insights, try this on for size. Its baffling that the majority of US citizenry is so broke that they cant live without a month or two worth of salary. The wealthiest country on earth, come on,,, really!???? Debt jubilee? Ok fine. The average citizen in most third world countries will survive and give zero shits because life goes on. Seems only the developed countries are gonna have a hard time dealing with this because guess what, the EMs are already accustomed to suffering. We shall see how it all plays out. Good luck consumer economies....