“Traditional values” soon in the Russian constitution

On the government site devoted to the new constitution which is subject to consultation in Russia from June 25 to July 1, there is much to talk about, but only a very knowledgeable reader will understand that the reform will allow the current president to stand for two new terms after 2024.

→ ANALYSIS. Vladimir Putin changes the Constitution and his government. Why ?

The information is drowned in the middle of the so-called “conservative” or nationalist amendments which will be inscribed black and white in the texts: the ” faith in God “, marriage as a heterosexual institution, the protection of “Historical truth”, that of Russian culture and Russian identity, the link with the USSR, plus some social measures including the indexation of pensions to inflation.

Sometimes contradictory values

These principles are at the heart of the value system that Vladimir Putin has wielded since the beginning of the 2010s, in order to cement the population around a common narrative. “These values ​​are artificial and cconstitute an ideology which is a mixture of stereotypes of Soviet propaganda and patriotic banalities, Judge Andrei Kolesnikov, political scientist at the Carnegie Center in Moscow. As if someone had clumsily merged the communist triad “Lenin, Party, Komsomol”, with the famous triad of Count Sergei Ouvarov “Orthodoxy, autocracy, nationality” under the Czar of the XIXe century Nicolas I. “

This combination of sometimes contradictory values ​​- to maintain the link with the USSR while inscribing faith in God in the constitution – took on importance after the annexation of Crimea in 2014 and the rise of the West. “The Poutinian state was first built without ideology, recalls Anna Colin Lebedev, lecturer at Paris Nanterre University. The constitutional amendments aim to display the difference and the specificity of Russia vis-à-vis the West, within the framework of their geopolitical rivalry. “

The champion of traditional values

By inscribing a certain number of references to the so-called traditional and mythified values ​​of eternal Russia, Vladimir Putin is doing a double blow. On the one hand, it strengthens the interest of voters for a reform that strengthens presidential power, at a time when its popularity rating is crumbling. On the other hand, he cultivates his image as the last defender of European “traditions” that would be threatened by globalization, LGBT “propaganda” and immigration, a theme dear to the European far right and its parties.

By building a narrative that aims to be coherent around faith, marriage and the family, the Kremlin relegates to the background the growing demand for more social justice, evoked by some symbolic amendments such as the need for the state to take care of children. What is the effect of this speech to citizens? “Comments against gay marriage are widely shared in Russia, recalls Tatiana Kastoueva-Jean, researcher at the French Institute for Strategic Relations. But Russian society is not really conservative ”, adds the author of Putin’s Russia in 100 questions (1).

Behind the display of values, the behavior of Russian families is not far from that of Europeans. If the country has one of the highest marriage rates in the world, it is also a champion of divorces (1 in 2). Another indicator: citizens declare themselves to be overwhelmingly Orthodox (70%), but less than 4% practice.

Besides, a third of those who declare themselves Orthodox say at the same time … not to believe in God. And many refuse to see the Orthodox Church intrude into their private lives, whether on the question of abortion, very widespread since the Soviet era, or the use of surrogate mothers, a legalized practice.


The Wall Street money manager says the stock market won’t bottom until investors throw in the towel – and we haven’t arrived yet

It will be worse before it gets better – much worse, according to Scott Minerd.

Guggenheim Partners’ global chief investment officer says investors continue to hold hope in many sectors, and this could be a sign that the worst hasn’t gone through a market that has had a beat in the past month.

“Since we have not yet seen the capitulation, it would be premature to aggressively take action and buy at current levels, whether it be stocks or credit activities.”

Minerd offered some sad insights for his customers in a Sunday research report, published during the period when the Republican-controlled Senate failed to pass a bailout package to help companies and individuals in difficulty navigate the pandemic. global that has brought economies around the world to a sharp halt.

“Since we have not yet seen the capitulation, it would be premature to aggressively intervene and buy at current levels, whether it be stocks or credit activities,” said Minerd.

Minerd said that the turmoil that the markets are facing now is a combination of the viral epidemic exacerbated by companies and investors who have resolved the debt in a rapid sequence to readjust the new reality caused by the onset of the deadly pathogen, which it has infected with more than 335,000 people and have caused nearly 15,000 casualties worldwide, according to data compiled by Johns Hopkins University.

“The turmoil we are seeing right now is the result of this leveraging,” wrote Minerd.

In his report, Minerd reiterated that the United States government and the Federal Reserve, in particular, need to allocate substantially more than they have already arranged to correct dislocations in financial markets and contain the economic blow resulting from the rapid spread of COVID- 19.

He explained the market situation and possible Fed strategies in this way:

To get a foundation under the markets we will need something very large, something in the $ 2 trillion range in the form of a pool of liquidity that can be quickly made available to the companies and businesses that need it along with funding facilities from $ 2 to $ 4 trillion from the Fed. A facility like this will be much more efficient than a targeted, time-consuming approach to attempting to design bailouts.

Similar comments were made by Minerd on Wednesday and the editorial board of the Wall Street Journal on Monday.

“That’s why I said we would need to see around 4.5 trillion dollars in quantitative easing (QE),” he said, adding that those funds would come in addition to all the measures that the American central bank has taken so far. , including a structure for the recently unrolled commercial paper market.

On Sunday, Treasury Secretary Steven Mnuchin said the Fed will play a key role in lending funds to businesses affected by the coronavirus pandemic.

“By working with the Federal Reserve – we will have up to $ 4 trillion in cash that we can use to support the economy,” Mnuchin told Fox News on Sunday.

‘I’m not betting on a global depression, but I’m saying that for the first time in the post-war era we are really getting too close for comfort.’

Minerd said that the Fed’s funding efforts could bring its budget to at least $ 9 trillion, or about 40% of 2019’s gross domestic product.

The investor said that areas of the financial market, ranging from airline leasing to guaranteed loan obligations, are in poor shape, but have not yet hit bottom.

“Interestingly, aircraft securitisations have not entered the realm of prices that would be appropriate,” he said, referring to the damage that the travel and airline industry suffers as a result of ongoing global shutdowns due to the coronavirus.

As for the epidemic that is spreading around the world, Minerd said that extrapolating from the trajectory that the epidemic took in Wuhan, China, where it originated, the United States has been able to see substantially more coronavirus cases within a month.

At the end of Sunday, there were 33,000 cases of infections with the new coronavirus strain in the United States, and he predicted that there may be around 2 million infected people in the United States in the next 30 days.

“This tells us that our life patterns will not return to normal in the next 30 days, mainly because we have not yet blocked the whole country,” wrote Minerd.

So can Washington lawmakers save the market or the economy early? Minerd said not to hold his breath, because even if Capitol Hill were to pass a bailout bill, it could take months to eventually bring about calm in the economy and market.

For this reason, he says that “buying the plunge”, or market downturns, a practice that has proven profitable in the past two years until this recent bout of stomach upset volatility could be a foolish commission.

“Even if Congress approves all the necessary legislation, we should expect the market to be vulnerable for another six months,” he wrote.

“This means that” buying the plunge “in the expectation that Congress will pass something soon is probably not a prudent investment strategy,” he said.

So far, the markets have been in freefall, with the industrial average of Dow Jones
the S&P 500 index

and the Nasdaq composite index

all with the worst weekly drops from the financial crisis of 2008 to the closing on Friday.

And Monday’s action was gearing up to be more staggering losses to kick off the week, based on the downward action of US stock index futures last Sunday.


The US mortgage bond market is in an uproar, awaiting the Fed’s sinking relief


Times Square in New York City as coronavirus deaths rise. Getty Images

Getty Images

Investors say it looked very similar to 2008 in most of the $ 11 trillion US home finance market, only without the defaults.

Many of them attribute credit to the Federal Reserve’s swift action last week, which opened its time to unleash trillions of dollars, calming some of the shocks of the spread of the coronavirus epidemic and its expected tribute to the nation and ‘economy.

SeeHere is a breakdown of the Fed’s bailout programs to maintain credit flow during the pandemic

The central bank’s initial plan was to purchase at least $ 700 billion in Treasury debt and agency mortgages, or where most of all home loans are grouped in securities with public support.

But investors continue to recover from the quickest selloff of their careers and also claim that safe haven activities, including agency mortgage bonds, continue to be a sales target as investors seek to accumulate liquidity in the event of market carnage and the last week’s record bond fund outflows are not over yet.

“There are still many more people who sell for liquidity, which is first and foremost,” Steven Oh, global manager of fixed income at PineBridge Investments in Los Angeles told MarketWatch. Although “the cost of transactions has improved,” he said. “It’s still not ideal.”

To read: Unemployment could reach 30% in the United States, says the Fed’s Bullard of St. Louis

US Treasury Bonds and Mortgage Bonds have been rewarded for safer and more liquid havens during stormy periods so far.

This chart by BofA Global Research shows how terrible Treasury market liquidity has been in the past few days:

Trying to trade agency mortgage bonds has been slightly better, unless an investor is willing to sell bonds at a value lower than their recent value.

But hope remains that the Fed’s combination of emergency loan programs and asset purchases will be sufficient to bring further calm, although the Senate failed to remove the first hurdle of a massive coronavirus stimulus measure and equity futures on Sunday. Americans have plummeted again.

In addition, President Donald Trump, in the face of criticism for his response to the coronavirus, also on Sunday ordered the National Guard in California, New York and Washington to help manage the pandemic. New York City, the center of global finance, also ordered its 8.5 million residents to stay home from work as the state prepared to become a hot spot in the global pandemic.

“I think the Fed will continue to buy mortgage bonds until there is some sort of normalcy,” said John Kerschner, head of the United States’ structured products at Janus Henderson Investors in Denver, in an interview with MarketWatch. “Who knows when it will be.”

The $ 6.9 trillion agency mortgage bond market is typically one of the most sought after havens in U.S. finance, largely because government guarantees provide investors with significant coverage of losses, with the exception of any premium on bonds that trade above their $ 100 repurchase price.

Last week alone, the Fed purchased more than $ 300 billion in government bonds and agency bonds, or MBS, pledging to buy at least $ 500 billion in assets on Sunday night.

While this makes the Fed (again) the “lender of last resort”, analysts at BofA Global Research said Sunday they expected the central bank to further increase its market intervention and implement a “full and unlimited backstop on the MBS market. of the agency “in the days and weeks ahead, as well as other stabilization measures.

It is “time to unleash the entire Fed arsenal,” urged the BofA team led by Mark Cabana, in a client note. “What started as a health crisis quickly turned into an economic crisis and is likely to quickly become a housing / financial crisis.”

Check out: Here’s how a Fed plan would work to support the corporate and municipal bond market


The Fed establishes a new loan program designed to ease the turmoil in the money markets

Just half an hour before midnight on Wednesday, the Federal Reserve announced further steps to try to stabilize US financial markets shaken by the sudden slowdown in economic activity resulting from the deadly outbreak of the coronavirus.

In a statement, the Fed expanded its support to include money market mutual funds.

The board of central bank governors has approved a new money market mutual funds liquidity instrument, or MMLF, to help money market funds to meet redemption requests from families and other investors.

Jefferies economist Ward McCarthy said the Fed is facing a problem due to the fact that investor cascading repayments from mutual funds and ETFs were causing “fire sale” prices in income markets fixed. There has also been a substantial price dislocation in credit markets due to these cascading repayments, he added in a note.

The Fed said the MMLF program will support credit flow to households and businesses.

Under the structure, the Boston Fed will make loans available to eligible financial institutions backed by high quality assets purchased by the financial institution from money market funds.

The MLMF is similar to a program launched during the financial crisis, but the new facility will acquire a wider range of assets, the Fed said.

The Treasury Department will provide $ 10 billion in credit protection to the Fed.

Eligible borrowers are US banks and bank holding companies and their affiliates broker-dealers or US branches and agencies of foreign banks.

Eligible collateral is US Treasury Bonds or GSE Bonds, Highly Rated Asset-Backed Commercial Cards or Highly Rated Unsecured Commercial Cards.

The Fed has already taken several measures to maintain the flow of money in short-term financing markets, including increasing the amount of short-term loans it offers banks.

This is the third funding structure during the crisis that the Fed set up this week. The Fed has developed a plan to grant primary dealers on cheap Wall Street loans and a program to unlock the so-called commercial paper market.


Private credit weighs risks and opportunities in market turmoil

The turmoil in debt markets triggered by the spread of the new coronavirus has disrupted private equity agreements as high yield debt and syndicated loan providers have withdrawn.

But the picture for private debt firms is more complicated. Although private credit companies are evaluating the potential spill-over of market volatility for their credit portfolios, some also see potential opportunities to intervene when other debt providers withdraw. However, their ability to invest their capital will depend heavily on the will …


Trump announces “the biggest stock market hike in yesterday’s history”, but many investors believe the worst didn’t end in coronavirus panic


– President Donald Trump

This is Trump on Saturday morning, referring to Friday’s wave of the Dow Jones Industrial Average
+ 9.36%
the S&P 500 index
+ 9.28%

and the Nasdaq Composite
+ 9.34%
which has been the largest daily percentage gains of the main equity benchmarks since 2008.

Dow’s gain on Friday was the biggest ever in terms of points, as much as Thursday, Monday and Wednesday, respectively, had produced the biggest drop, the second largest and third largest of a day in the index. blue-chip.

Friday’s rally in US stocks nearly made up for the losses it had suffered the day before, when the market saw its worst day in terms of percentage loss since the crash of Black Monday in 198. The Dow fell approximately 20% from its highest record. This puts him in a bear market.

‘[W]we can all agree that panic has infiltrated various aspects of our lives in the past few days. ”

– Frank Cappelleri, Instinet

Friday’s gains followed a week of unmatched market volatility that sparked numerous references to the financial crisis 12 years ago and the 1987 crash, except that in some respects this crisis proved to be more intense and disturbing for market participants .

“Investor psychology is clear only in hindsight, but we can all agree that panic has infiltrated various aspects of our lives in the past few days,” wrote Frank Cappelleri, Instinet’s executive director, in a note from research to customers on Friday.

In fact, all three stock indices have collapsed in the bearish market territory from record highs to their fastest clips in history.

Check out Trump’s tweet here:

Probably the catalyst was COVID-19, the infectious disease that was first identified in Wuhan, China in December and has quickly spread to over 100 countries, has infected 147,000 and has caused 5,500 victims so far, according to Johns Hopkins University.

Friday’s rally came after Trump declared a national emergency, opening up access to $ 50 billion in state and locality funding to combat the coronavirus pandemic, while claiming that the country was speeding up tests and expanding capacity. of hospitals and doctors to provide treatment for pandemic disease.

Focusing on a higher Friday explosion for risky activities, however, could be a mistake against the background of the turbulent nature of the week. The Dow, for example, experienced fluctuations of at least 1,000 points in the five consecutive sessions of the week. In other words, the Dow has booked moves of around 5% or more for each trading session of the entire week.


Change of Dow point from 9 to 13 March

Dow% change

March 13



March 12



March 11th



March 10



March 9



Amidst those monstrous moves, the blue-chip index saw a rapid conclusion in the longest bull market in history, which, perhaps ironically, turned 11 on Monday and actually died by Wednesday, when the World Health Organization The disease spread by the new coronavirus SARS COV-2 has gone into a pandemic.

It is a measure of the implied volatility on Wall Street, Cboe’s volatility index
Friday saw an intraday reading that has been its highest since 2008 – a period that saw it record a record high of around 80. The index, known colloquially as the “fear gauge”, has an average reading historic of 19 or 20.

Another measure of market fear, CNN’s Fear / Greed index, hit 2 on a scale of 100, its lowest reading in its history, with lower readings indicating more extreme fear.

The week was also marked by a $ 15 trillion Treasury market seizure, which led to Federal Reserve intervention. The central bank took steps to stem what described an “unusual upheaval” in the US public debt market by injecting approximately $ 1.5 trillion into Wall Street’s major financial markets.

The Fed’s rate-setting body, the Federal Open Market Committee, is now expected to cut federal fund rates by a full percentage point on Wednesday March 18, following the end of the two-day political meeting. This followed a reduction in the emergency half-percentage point rate on March 3. That first intermittent interest rate cut in 12 years brought the target rate in the range of 1% to 1.25%.

Further action is expected by monetary policymakers and other parts of the government as the world attempts to reduce the substantial economic damage already caused by the coronavirus pandemic

To read: The Fed soon saw interest rates cut to 0% in an attempt to help the coronavirus storm

Friday’s earnings, while obviously the opposite of anyone who doesn’t bet on the market, are viewed by some market experts as potentially more indicative of a bear still lurking than a clear signal.

Market extras:Wall Street fears “flashbacks to 2008” with forced sale in the US $ 9 trillion corporate bond market


Free trading could not have come at a worse time

The era of free trade in securities came at an unfavorable time, exactly when many individual investors could have been better served to not trade at all.

Just in October Charles Schwab, E * Trade Financial, Fidelity Investments and TD Ameritrade Holding announced that they would charge zero fees for most of the exchanges. The moves put them in line with some new online startups, notably Robinhood Financial, and were followed by further free trade expansions at major banks such as JPMorgan Chase and Bank of America.


How the coronavirus spread is stressing corporate credit as governments weigh the economic stimulus

Empty airline seats, canceled hotel rooms and lost social gatherings have suddenly become a part of normal life as U.S. families and companies try to avoid the spread of the infectious disease known as COVID-19.

But as global governments look at potential economic stimulus measures to combat coronavirus, now a pandemic, consumers are staying at home, avoiding travel and limiting household spending. And this threatens to detonate a ticking time bomb for US companies that have more debt than ever.

“There are clearly many nerves about what could happen to the economy and the ability of businesses to generate enough revenue to cover their costs,” Wilmington Trust chief economist Luke Tilley told MarketWatch. “I know we are concerned about it.”

Currently, the record half of the corporate investment grade bond market of approximately $ 6.6 trillion is in the BBB credit rating bracket, the lowest category before falling into the speculative or “junk bond” status.

In a recession, Guggenheim Partners’ Scott Minerd estimates that up to $ 660 billion, or about 20%, of bonds in the BBB band could lose their coveted investment grade ratings and “flood” the high yield market.

The U.S. trade debt is now almost the same as that of households for the first time since 1991, a potential warning sign for the economy, as Federal Reserve Chairman Jerome Powell noted last October. The debt of non-financial corporations stands at around $ 16 trillion, according to Fed data, while household debt is roughly the same.

Corporate debt burdens have been a widespread concern in recent years, with central banks and regulators warning that corporate over-indebtedness could fail similarly to subprime mortgages ahead of the financial crisis. 2007-08.

But while many saw problems coming, few could imagine that it would come in the form of a new coronavirus, which was first detected in Wuhan, China in December, and has since affected more than 120,000 people and killed over 4,300 globally, while grinding daily life in some Asian and western cities, it stops as officials struggle to slow down its spread and relapses.

US stocks were sliding into bearish market territory on Wednesday with the Dow Jones Industrial Average

losing 1,200 points in afternoon trading while investors worried about stumbling on the part of the United States government in its efforts to quickly create fiscal programs that could offset the loss of income and wages that could paralyze the economy.

To read: Dow industrialists delve into the slide after W.H.O. declares the coronavirus pandemic

“Obviously, the appetite for risk has clearly evaporated,” said a senior investment-grade bond banker Wednesday, who was not allowed to speak publicly on the issue, but added that the limited outbreak of new issuance assets Tuesday’s bonds are now suspended.

He attributed the deteriorating risk appetite on Wall Street to disappointment with President Trump’s efforts this week to propose emergency efforts to fight the virus. “There is no doubt that market players are focused on some fiscal stimulus,” he said.

And as Steven Ricchiuto, chief economist of Mizuho Americas, said, following the sharp drop in riskier oil prices, equities and corporate bonds, “the explosion of BBB debt was boiling in the background”, but now it’s back among the best investors concern.

“These developments are reminiscent of those that preceded the financial crisis, although this time the shock of supply and demand was triggered by a virus rather than excessive speculation,” he wrote in a customer note.

See: Bond Investors Claim Some Energy Companies “Will Not Survive” Markets Slamming the Oil Route

The foothold of the viral epidemic in the United States led Wall Street to consider the probability of zero earnings growth for companies in the first quarter, as well as a potential global slowdown which makes it more difficult for companies to maintain promises to earn their way out of their debts.

This week the economist of TS Lombard estimated that travel, recreational activities and “other” services represent more than 15% of the US consumer spending and that, after an “initial hoarding” to stock up on basic goods necessity, the second quarter of this year will see a sharp drop in household spending and an increase in recession risks.

“It is easy to see how a third of this is [spending] it could be cut, or at least postponed, as is clearly happening with air travel, “wrote Charles Dumas, chief economist at TS Lombard, in a note to clients.

While it is too early to assess how long flights, airports, casinos and hotels will face shorter journeys, Joachim Fels, Pimco’s global economic advisor, said he expected the United States and Europe to end up seeing a “relatively mild” recession. and short “which resolves in the second half of 2020, in a note issued over the weekend, but still worries about potential cracks if the company’s cash flows shrink and trigger a” sharp tightening of the financial conditions that affects the economy real”.

However, no two crises are alike. “Obviously, a slower growth model has an impact for BBB companies that have higher levels of leverage in that space,” said David Brown, Neuberger Berman’s global investment grade fixed income co-manager, in a MarketWatch interview.

“But 20 years ago, the BBB market was dominated by cars, metals, mines and energy, cyclical companies that with the turn of the economic cycles, their cash flows have been drastically reduced,” he added, adding that the sector now it is home to a wider range of industries from healthcare companies to cable service providers, which may prove more resilient in the event of a recession.

Here is a sector breakdown that BlackRock provided to the Federal Reserve Bank of New York last month, during a presentation by Rick Reider, global Chief Investment Officer, who suggested that corporate credit conditions are too easy and that policy rates too much low “can hurt more than help, which is taking place today in the markets”.

But even though coronavirus shocks end up plunging corporate America, Brown expects credit rating companies to leave companies room for maneuver before cutting their ratings, which could avoid a wave of downgrades. .

And if things get really bad, Wilmington Trust’s Tilley said that there is always a possibility that policy makers will revive the “alphabet soup” of the rescue facilities that were created during the global financial crisis to prevent the collapse of entire sectors and spread the credit.


What are airlines doing on coronavirus? A list of cancellation policies.

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Asian markets plummet after the sharp drop in oil prices

BEIJING – Asian stock markets slumped on Monday after global oil prices were born out of concerns that a global economy weakened by a virus outbreak could be flooded with too much crude oil.

The Tokyo benchmark fell by over 6%, while Sydney, Seoul and Hong Kong also experienced heavy losses. Shares also sank in negotiations in the Middle East on Sunday.

Markets were already troubled by the potential impact of the virus epidemic that started in China and stopped travel and trade.

Saudi Arabia, Russia and other oil producers are discussing how much to cut production to support prices. USA rough

it fell 26% or from $ 10.75 to $ 30.57 per barrel in e-commerce on the New York Mercantile Exchange. Brent raw,

used for international prices, it fell 25%, or from $ 11.40 to $ 33.87 per barrel.

Tokyo Nikkei 225

fell 6.2% and the Hong Kong Hang Seng

sank by 3.9%, while the Shanghai Composite index

it was out 2.2%.

S & P / ASX 200

in Sydney it fell by 5.8%. The Kospi

in Seoul it lost 4.2%.