“The opening up of Iraq’s enormous verified oil reserves to foreign expertise in the aftermath of the fall of Saddam Hussein was hailed as the means to kickstart its economy and potentially transform the south into an economic stronghold. Instead, ordinary Iraqis have seen little or no benefit from the proceeds of the country’s multibillion-dollar oil industry, much of which has been siphoned off by corrupt politicians. Across the south in recent months, simmering anger over corruption and unemployment has been fuelled by the dire state of public services, regular power cuts and water shortages.
“Once there was a time when the Bani-Mansour land, not far from where the Tigris and Euphrates meet, had water and more than 300,000 palm trees, villagers said. Large numbers of buffaloes and cows cooled themselves in the green muddy waters of its canals.
“But drought and the intrusion of saltwater from the Gulf have wiped out most of the palm groves, the cattle have been sold, local rivers have dried up and the canals have stagnated, clogged with rubbish. Corruption and mismanagement on the part of local and central government, both dominated by a kleptocracy of religious parties that have ruled Iraq for more than a decade, has exacerbated a slow-motion environmental disaster.
“The oil companies, which are supposed to train and hire a workforce from local populations and invest back into development projects, are forced to hire those with connections to powerful tribal sheikhs and the Islamist parties. Funds for those populations rarely materialise and almost none of the oil revenuestrickle down to the population. Meanwhile, local militias with links to clans and political parties have formed their own companies, which land lucrative security contracts with subsidiaries of foreign oil firms…
“The flashpoint came in early July, when the temperature soared to nearly 50C, the electricity failed repeatedly, and the tap water ran hot and as salty as sea water. Two dozen men gathered outside the gates of one of the oil company compounds, blocking the section of the road adjacent to their village…”
“Iran’s currency crisis has left ordinary citizens enduring soaring living costs, but prosecutors allege that corrupt business people have turned it into a moneymaking opportunity. In one case the name of a dead person was used to import 10,500 mobile phones using foreign currency issued at Iran’s favourable official rate… Many Iranians fear politically connected businessmen have taken advantage of the crisis to enrich themselves.”
“The commander of the navy of Iran’s Islamic Revolutionary Guard Corps, Gen. Alireza Tangsiri, warned on Monday that Iran maintained control of the Persian Gulf and that the U.S. Navy did not belong there… The Strait of Hormuz is one of the world’s most important maritime chokepoints. Approximately 18.5 million barrels of oil a day—more than 30 percent of the seaborne oil traded worldwide—flowed through the strait in 2016.”
“Mexican state oil company Pemex said Monday its oil production dipped 5,400 b/d month on month to 1.840 million b/d in July, and was down 145,000 b/d year on year, due to a decrease in production at mature fields in southern Mexico. Pemex’s production has been in constant decline since peaking at 3.4 million b/d in 2004.”
“Trinidad’s Energy Minister Franklin Khan is sending a strong warning that Petrotrin’s current state of affairs has the ability to “bankrupt” the country, as he yesterday described the state oil company as coming to what is referred to in astrophysics as a “black hole”.”
“President Nicolas Maduro said Venezuela will begin to sell certificates backed by gold ingots as a savings mechanism starting next month. The certificates, backed by 1.5 grams and 2.5 grams of gold, are meant as tools for pensioners and others to save money and use as credit lines to acquire cars and other items, Maduro said in a televised address. The gold is meant as a more stable way for Venezuelans to hold their diminishing funds as inflation in the socialist nation runs at over 100,000 percent.”
“The ongoing currency crisis in Argentina is likely to trigger a recession as soon as this year, the government said, and poverty is expected to rise as inflation is spiralling out of control.”
“…the dangers of unsustainable growth patterns [in the emerging markets] will bring the party to an abrupt halt, potentially triggering financial contagion. Already, as escalating trade tensions generate added uncertainty, nervous investors are edging toward the door.”
“Beijing wants to shore up growth without inundating the economy with cheap credit. To see how hard that will be, take a look at China’s roads and railways. China is the 800-pound gorilla of global infrastructure. Its building prowess has permeated popular culture, as in the disaster movie “2012” where China constructs giant ships to help humankind escape rising seas. Recently, however, China’s infrastructure build has all but ground to a halt.”
“South Korea proposed on Tuesday the sharpest expansion in fiscal spending in a decade for 2019 as policymakers focus on creating jobs and boosting welfare in the face of a deteriorating job market.”
“With some U.S. farm products getting slammed by retaliatory tariffs, the Trump administration is prepared to start its emergency plan for agriculture right after Labor Day in a “three-pronged approach” that will initially include about $6 billion in aid.”
“…while judgements differ about the sustainability of US government debt, they both accept the standard measure of it as accurate. This is a mistake, and possibly a catastrophic one. The Congressional Budget Office recently reported that the federal budget deficit in the first 10 months of this fiscal year was US$116 billion higher than it was at the same time last year. The CBO is now projecting that the annual deficit will reach US$1 trillion by 2020. This is worrying, but it does not reflect the harsh truth. The annual deficit almost certainly surpassed US$1 trillion last year.”
“A growing concentration of debt by a thin slice of corporate America has echoes of the subprime lending boom that contributed to the U.S.’s economy collapse and the humbling of its almighty financial industry in 2008.”
““…A Barrons commentator indicated that problems in the credit markets (and the BBB bond market) are a mere “six to 12 months away.” …the corporate debt market is in a worse position to cope with a recession than it was on the eve of the 2008 financial crisis.”
“Storm clouds are brewing over the global technology industry. A host of hardware companies, including Apple Inc., Samsung Electronics Co., Foxconn Technology Group and Intel Corp. are sitting on inventory stockpiles not seen since the financial crisis a decade ago.”
“Falling foreign demand for Italian government bonds is pressuring domestic banks to step into the breach, as they did back in 2011-2012. Yet they may find it harder to come to the rescue of the country’s debt this time around.”
“…there are growing signs of weakness [in the UK economy] after the Bank of England raised interest rates above the emergency level set since the financial crisis. Ushering in a new era of higher borrowing costs for consumers and businesses, the move comes as ministers prepare the public for Britain crashing-out of the EU without a deal with Brussels.”