“President Trump continues to escalate his trade threats against China.
“He’s now threatening 10% tariffs on all Chinese imports.
“While the effects on US consumers and economic growth would be bad enough, there’s a risk of triggering a full-blown financial crisis.
“That’s because China’s economy is a debt-fueled house of cards, with especially strong exposure to a crash in its $43 trillion real estate market.
“This means that this very risky strategy might either force China to make major concessions on trade, or could spiral out of control and trigger a potential global recession.”
“Global growth has peaked and is expected to decelerate further. Signs of a slowdown have been evident since the beginning of 2018… Over the last decade every global slowdown has been marked by a crisis. “Given the precarious state of global trade, a tariff war could create a Wiley Coyote moment where global growth could fall off a cliff. Moreover, global growth is not expected to improve in the near term because global liquidity is evaporating…”
Analysts are taking note of the struggles in China’s banking industry, which is being battered by an official deleveraging drive… Spikes in the volume of non-performing loans and an increase in loans overdue are among the reasons. One of the lenders — Guizhou-based Guiyang Rural Commercial Bank Co. — saw its bad debt balloon nearly tenfold in the space of two years, according to the assessor that slashed its rating.”
“Australia’s building commencements, fuelled by investor apartment construction, look like heading from boom to bust, according to forecaster BIS Oxford Economics. In a reality check for investors who bought at the top of the apartment boom, BIS is predicting the biggest correction since the global financial crisis hit in 2008, with housing starts set to fall by almost 23 per cent by 2020.”
“Australia is facing an economic shock akin to the global financial crisis, an expert has warned. Some $500billion worth of interest-only mortgages expire in the next four years, raising fears that thousands will default when their repayment sums increase. High mortgage default rates in the US sparked the 2007 global crash by leaving banks short of cash.”
“There’s no shortage of potential triggers for a looming Armageddon. Trade conflicts between the US and almost everyone, friend and foe, political instability in Europe as the UK tears itself apart over how to exit the European Union, an economic slowdown in China and speculation of another European banking crisis take regular turns as the likely culprit. Underlying it all is a colossal build-up of debt, hoisted upon the global economy in the past decade by central banks as they desperately attempted to stave off a debt-fuelled financial crisis.”
“US President Donald Trump has launched a furious all-caps Twitter rebuke of Iran declaring “you will suffer consequences the likes of which few have ever suffered before.””
“Direct foreign investment into [Saudi] fell to $1.4 billion last year from $7.4 billion in 2016, according to United Nations figures released last month. That compared with an average $18.2 billion annually in the years leading up to the global financial crisis in 2007-2008 and last year fell in part because of fewer investments among multinationals, said the U.N. Saudi officials didn’t dispute the numbers.”
“The number of foreigners terminated from public sector jobs in Kuwait has left banks in the country with a sizeable bad debt problem. Local media said that Kuwait’s efforts to create more jobs for nationals by releasing foreigners has created a problem when thousands of laid off expatriates became unable to fulfill their financial obligations towards local banks.”
“In Dubai’s posh Jumeirah Beach Residence district, luxury apartment rents are down about 15 per cent from a year ago – a sign, some fear, that the wealthy emirate’s recipe for economic success is getting stale.”
“The currency mismatch and volatile capital flows in Turkey is at a structural risk with an alarming problem of reaching a moment where they cannot borrow any more. The increased interest rates in the US have caused reallocation of funds out of several emerging economies, thus structural weakness has become obvious in the MENAT region.”
“Pakistan’s economic situation has further deteriorated during short tenure of the incumbent caretaker government that neither has intervened in the market to stabilise the currency nor increased the foreign exchange reserves. The country’s economic situation especially external sector is deteriorating due to widening of current account deficit and loan repayment.”
“As it stands, Lebanon’s public debt is $80 billion, the third highest globally as a percentage of GDP (150%) with more than one-third of the annual budget dedicated to servicing the country’s debt, making—without significant change—economic recovery impossible.”
“Hundreds of Argentinians took to the streets of Buenos Aires to protest against a standby agreement reached with the IMF in June for a three-year, 43 billion euro loan. “This agreement demands a reduction in the fiscal deficit that would imply job losses in the state, a reduction in the budget for education, health, housing, everything related to public works,” said Leftist Front deputy, Nicolás del Caño. “This means the crisis generated by the big capitalists wants the general public to pay for things.””
“Three months after the protests began in Nicaragua, which have unleashed deadly violence, with more than 350 killed and thousands injured, the country’s economy suffers serious consequences due to the fall in investment, employment and production.”
“The OBR’s fiscal sustainability report does what it says on the tin — it looks at the sustainability of the [UK’s] public finances over the long term. They are not, judging by its latest report, remotely sustainable.”
“While ever greater food production, mineral extraction, forest clearance and fossil-fuel burning bring short-term (and unequally distributed) lifestyle gains, the long-term consequences are increasingly apparent in terms of soil erosion, water shortages and climate disruption. The day of reckoning is moving nearer, according to Mathis Wackernagel, chief executive and co-founder of Global Footprint Network.”