“South Korean exports, a data set often held up as a bellwether for the health of the global economy, fell off a cliff in January, pointing to a troubling slowdown in global trade.
“Exports from the east Asian nation dropped 14.6% year-on-year in the first 20 days of 2019, according to data released Monday morning. That compared to an increase of 1% over the same period in December.
“”We had expected a contraction, but the extent of the fall was a surprise,” Freya Beamish, chief Asia economist at Pantheon Macroeconomics, wrote in an email.
“South Korean trade data is often held up as a canary in the coalmine for the global economy, as it often acts as an early warning sign for trouble ahead.”
“The global economy is weakening at a faster rate than expected, with the International Monetary Fund (IMF) warning the world is at risk of a sharp downturn… The report warned of a number of flashpoints that could lead to even lower growth trajectories across the world.
““A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given high levels of public and private debt,” it said.”
“Many Chinese factories have eliminated overtime and looked for other ways to trim employment costs. “Manufacturing has sunk from buoy to anchor over the past two quarters,” the China Beige Book, an economic consulting firm, concluded in an analysis last month.
“The Chinese government had hoped that the services sector would expand when manufacturing contracted. But the overall economy remains so dependent on manufacturing that the services sector has also weakened in recent months…”
“President Xi Jinping stressed the need to maintain political stability in an unusual meeting of China’s top leaders — a fresh sign the ruling party is growing concerned about the social implications of the slowing economy.
“Xi told a “seminar” of top provincial leaders and ministers in Beijing on Monday that the Communist Party needed greater efforts “to prevent and resolve major risks,” the official Xinhua News Agency said.”
““Since the 2008 global financial crisis, borrowings have increased substantially and this overhang of global debt is starting to be stressed. Unlike a decade ago, when the next economic and financial downturn occurs, the policy tools to reverse it will be less effective.”
“Corporate Australia is facing a slump in business prosperity for 2019.
“A quarter of the nation’s chief executives expect business conditions to deteriorate this year, according to Ai Group’s annual CEO Business Prospects Survey. The biggest risks flagged for 2019 include a lack of customer demand and skills shortages.”
“EU member states, fearing the worst, began pushing through their no-deal contingency measures as a matter of urgency…
“The EU will not reopen the withdrawal agreement or scrap the backstop, but could consider allowing more time by extending article 50 for a “valid reason”. In short, we’re no nearer to knowing anything much about how things play out from here.”
“”We need to realize that from a monetary perspective there is no ammunition left in Europe, (the) interest rate is at an all-time low, and also the QE (quantitative easing) program which we are now building down …So if we really get to an economic slowdown in Europe, I think the central banks and governments, from a monetary point of view, have no ammunition left to address it,” Feike Sijbesma, CEO of DSM told CNBC at the World Economic Forum in Davos.”
“One month into the longest-ever funding impasse in modern American history, there is little evidence to suggest that Donald Trump and congressional Democrats will come together to end the government shutdown anytime soon…
“We’ve examined the impact of the shutdown by the numbers, and how it has impacted the broader US.”
“Lebanon’s debt rating was cut by Moody’s Investors Service, which cited increased risks that the Middle East nation will undertake measures that may constitute a default.
“The country’s credit score was lowered one step to Caa1, the rating company said in a statement. That’s seven levels below investment grade…”
“…speculators are already buying up Venezuela’s currency in the hope it become a collectors’ item of the future.
“Abdullah Beydoun, of California-based Banknote World, travelled to Latin America to acquire great wads of bank notes being printed by Venezuela’s panicking leaders in 2017 and 2018.”
“In every region of the world, more CEOs than last year now believe global economic growth will decline over the next 12 months.
“That’s according to PwC’s annual global CEO survey, the results of which were released on the sidelines of the official WEF proceedings. The growing bearishness is stark, as is the degree to which it is shared by business leaders regardless of their geography.”
“Forced to slash borrowing costs, in some cases below zero, to fight the global financial crisis, the big central banks relied heavily on verbal hints and signals to set expectations about the future path of rates. By promising to keep monetary conditions ultra-loose, they hoped to push down longer-term rates and spur growth.
“A decade on, they are again grappling for the right language as they wind down crisis-era measures while still facing an array of daunting risks, from the U.S.-China trade war to Brexit and slowing global growth.”