“The global economy is probably in recession, with most cyclical indicators showing business activity is flat or falling. Recessions become obvious only once they are well established given the lagging nature of most economic data…
“Policymakers are reluctant to announce a recession for fear of harming consumer and business confidence and worsening the downturn (“Business cycles: theory, history, indicators and forecasting”, Zarnowitz, 1992).
“But almost all the main economic and industrial indicators that provide a reliable guide to the business cycle confirm the economy has already slowed severely… By most measures, the global economy is in the midst of the deepest slowdown since 2015, and in many cases since 2009.”
“The escalating trade war between the U.S. and China is nudging the world economy toward its first recession in a decade with investors demanding politicians and central bankers act fast to change course.”
“Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back. Credit-grading firms are giving out increasingly optimistic appraisals as they fight for market share in booming debt-securities markets.”
“Venezuela’s banana and plantain crops face potential infestation of a fungus already effecting neighbouring Colombia, an agronomists association said on Wednesday, potentially devastating one of Venezuela’s main foods amid rising hunger.
“A hyperinflationary economic collapse has left millions of the OPEC member’s citizens unable to obtain enough calories and has pushed diets towards starchy staples that grow readily in its tropical climate.”
“Saudi Arabia has phoned other oil producers to discuss possible policy responses as oil prices fell to a seven-month low, a Saudi official said. The kingdom won’t tolerate a continued slide in prices and is considering all options, the official said, asking not to be identified discussing private talks. He didn’t say what measures were being discussed.”
“Norway’s krone hit its lowest level since the 2008 financial crisis as global trade tensions drive down the price of oil, threatening large parts of the Norwegian economy.”
“For Europe’s lenders, the hits keep on coming.
“Banks in Germany, Italy and the Netherlands warned Wednesday that making money and improving their operations are becoming more challenging as already-low interest rates look set to tick lower. Shares of Commerzbank AG, UniCredit SpA and ABN Amro Bank NV fell sharply as they struck a gloomy tone.”
“UK house prices dropped by more than expected in July with consumers becoming increasingly cautious as Brexit looms.
“The Royal Institution of Chartered Surveyors (Rics) said prices continued to fall last month as the property market showed signs of flatlining amid the rising risks to the economy from a no-deal Brexit.”
“India’s central bank outlined two measures on Wednesday aimed at easing liquidity pressures on crisis-hit shadow banks, but industry insiders say the moves, while positive, are unlikely to lead to any substantive improvements in the troubled sector.”
“China’s central bank set the daily midpoint for the yuan at its weakest level since 2008 early Thursday.
“The People’s Bank of China set the yuan’s CNYUSD, +0.2188% reference point at 7.0039 against one U.S. dollar, according to Dow Jones Newswires. The bank allows the yuan to fluctuate up to 2% higher or lower than that level.”
“The last time interest rates moved this rapidly and dramatically, Donald Trump had just been elected president, and the world saw the promise of faster economic growth and a long-anticipated pickup in price inflation.
“Interest rates, back in November, 2016 snapped higher in the six days after Trump won the election.
“Now, it’s the mirror opposite. Global rates, fueled by the actions of concerned central banks, are sinking rapidly.”
“Central banks in New Zealand, Thailand, and India moved to slash interest rates this week in an effort to bolster growth as fears of a global recession rise. The shift toward lower rates follows the escalation of the trade spat between the US and China that roiled global markets earlier this week.”
“Raoul Pal, the former GLG global macro hedge-fund co-manager, who was among the few investors that predicted and profited amid the 2008-09 mortgage meltdown, told MarketWatch in a Wednesday interview that the current set up has led him to a grim forecast for the economy and markets.
““The conclusion has to be that this is the most fragile point in global financial markets since the eurozone crisis in 2012, and potentially the start of the Great Recession in 2008,” he said.”
“The global bond market is sounding the alarm that things won’t be able to carry on much longer before a recession strikes.
“Germany’s yield curve is now at its flattest since the financial crisis — and yields across the world are slumping to fresh lows — in a cacophony of signs that investors are growing increasingly pessimistic about the outlook for the world economy. Central banks from New Zealand to India have responded by surprising markets with their efforts to boost stimulus.”
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