“The cost of hiring container ships has plunged 24 percent from a multi-year peak while raw material vessel rates have slumped 10 percent from a five-year high, adding to signs of slowing global trade with dangerous implications for the economy.
“While much of world is focussed on the stock market losses this week, the drop in shipping rates as trade declines because of the trade dispute between the United States and China, emerging market currency weakness and tighter credit conditions is an omen of slowing global economic growth.”
“Shares in Asia Pacific have plunged into bear market territory and wiped billions off the values of companies as one analyst warned that the losses could be a harbinger of a wholesale “capitulation”. After the worst day for tech stocks on Wall Street for seven years, markets were in retreat from Sydney to Shanghai as concerns about the global economy and rising borrowing costs were compounded by local factors.”
“[China] The chief engine of growth for the world’s carmakers is turning into their biggest headache. In the past 48 hours, auto giants from Volkswagen AG and Ford Motor Co. to Renault SA and PSA Group have pinned flagging profits and weakening sales outlooks on a slowdown in the world’s largest auto market. The companies spent billions of dollars over the past two decades setting up production and sales channels in China, as rapid growth saw millions buy first — and second — cars, only to see demand fizzle as the economy wavers.”
“A team led by Chinese President Xi Jinping’s top economic aide and tasked with maintaining financial stability amid an escalating trade war with the United States and a weakening economy met for the 10th time in two months on Saturday.”
“South Korea’s gross domestic product (GDP) moved at a snail’s pace of 0.6 percent in the third quarter against the three-month period…
“on path for the lowest annual growth in six years as corporate and construction spending soured sharply.”
“A series of defaults by India’s key infrastructure lender, Infrastructure Leasing and Financial Services Limited (IL&FS), has sparked fears about the health of other non-bank lenders and led to a squeeze in India’s corporate debt market that these lenders have relied upon. This event is likely to dampen credit growth and decrease private sector investment in infrastructure, which will significantly worsen India’s economic outlook.”
“”The toll is unbearably high. The immune systems of millions of people on survival support for years on end are now are literally collapsing, making them – especially children and the elderly – more likely to succumb to malnutrition, cholera and other diseases.”
“Mr Lowcock said the humanitarian crisis had been exacerbated by an economic crisis in Yemen.”
“The 2018 crisis stemmed from an accelerated Lira devaluation, which created a panic regarding the health of Turkish corporations and their ability to service and rollover external financing.
“The Lira devaluation was due to President Erdoğan’s public comments on interest rates…”
“Last year, Africa’s foreign debt reached the highest level since 2001, according to the British lobby group Jubilee Debt Campaign.
“Eighteen countries are experiencing an acute debt crisis or are on the brink thereof, according to the World Bank.”
“South Africa predicted wider budget deficits and cut growth forecasts in a bleak budget on Wednesday that focused spending on infrastructure, manufacturing and agriculture to boost the recession-bound economy.”
“Swedes became more pessimistic as the central bank prepares to raise interest rates for the first time in seven years and politicians struggle to form a government more than a month after the nation’s inconclusive election.”
“German private-sector growth slowed to its lowest level in more than three years as manufacturing and services both lost momentum, a survey showed on Wednesday, in a sign that Europe’s largest economy started the fourth quarter on a weaker footing.”
“Italy’s government is ready to intervene to help banks suffering from rising bond yields, said a top adviser to Deputy Prime Minister Matteo Salvini, in a warning to the European Union from the government whose spending plans have frightened investors. Italian banks would need recapitalization if the gap between yields on the country’s government debt and German bonds gets close to 400 basis points…”
““It is evident that the [UK] housing market is struggling for traction in the face of still limited consumer purchasing power, fragile consumer confidence and wariness over higher interest rates.
“Brexit uncertainty may also be having some dampening impact on activity,” said economist Howard Archer at the EY Item Club.”
“The value of euro zone banks .SX7E have collapsed by a third since markets touched their peak at the end of January, data showed on Wednesday, as another quarter of disappointing profits at Deutsche Bank (DBKGn.DE) dragged the region’s sector down.”
“The European Central Bank seems certain to keep policy unchanged on Thursday but it is likely to acknowledge the growth outlook is deteriorating, even if not yet by enough to derail a carefully crafted retreat from stimulus. Having exhausted much of its firepower with four years of unprecedented support, the ECB will reaffirm its asset purchases are set to end this year…”
“Builders warned of a slowdown in [US] home sales. And they were right – except the numbers are even worse than expected.
“Sales of newly built homes dropped 5.5 percent in September compared with August. And were down 13 percent compared with a year ago, according to the U.S. Census.”
“This is not about interest rates, or at least interest rates alone…
“Consumers, meaning workers, are becoming more and more uneasy about everything. In sentiment survey after sentiment survey, they may parrot the official narrative drawn from the unemployment rate, but in practice, they are behaving very differently.”
“Warning signs about the slowing of the global economy continue to crop up, and market jitters are taking the steam out of oil prices. U.S. corporate earnings are no longer sky-high… The [impact of] the U.S.-China trade war… is only growing as costs work their way through supply chains. This week, a slew of disappointing earnings came in… Evidence of a slowdown in China is also becoming apparent.”
Read yesterday’s ‘Economy’ thread here and visit my Patreon page here.