Our political, economic and financial dramas are becoming increasingly intertwined and volatile now:
“Hundreds of pro-democracy protesters have staged a new rally at Hong Kong’s airport, a day after a massive demonstration triggered a shutdown at the busy international travel hub.
“Only a handful of protesters stayed through the night, and flights resumed at the airport early in the morning. But by Tuesday afternoon, several hundred demonstrators had returned, responding to a call for a new rally.
“The unprecedented cancellation of all flights on Monday followed the fourth consecutive day of protests at the airport and amid increasingly threatening statements from Beijing. A Chinese official said “terrorism” was emerging in the city, while in Hong Kong authorities demonstrated water cannon for use in crowd control…
“On Tuesday the territory’s leader Carrie Lam warned that violence will push Hong Kong “down a path of no return”.”
“Hong Kong could be the black swan that no one saw as the tripwire for the global economy that could then rock stock markets.
“I know there’ll be smart Alec critics who one day will ask why ‘experts’ like me didn’t see this coming but Hong Kong and the likelihood of their citizens trying to bully China wasn’t on my list of logical issues that could kill financial markets’ confidence.”
https://www.switzer.com.au/the-experts/peter-switzer-expert/big-black-swan-trouble-in-little-china/
“Chinese monetary data for July was weak across the board, suggesting that Beijing’s efforts to galvanise new lending are not having the intended effect…
“The slump raises questions over the need for additional credit easing.”
“This year, those looking around in August for ill omens for the global economy are spoilt for choice…
“All debt crises need a trigger to set them off, and this [the devaluation of the Yuan] might just be it, since a devaluing currency makes it more expensive to pay back debts denominated in foreign currencies. And when your debts are as big as China’s, that’s potentially a very big deal.”
“Singapore’s economy has been tipped to enter recession in the third quarter of 2019 as the fallout from the US-China trade war continues to rock the Southeast Asian nation after second quarter growth was confirmed at minus 3.3 per cent…
“[It was] the worst reported quarterly growth for seven years.”
“Last month, Tokyo tightened guidelines on exports to South Korea of three materials crucial to making chips and display panels, an apparent protest against a decision last year requiring Japanese firms to compensate South Koreans forced into labour during Japan’s 1910-45 occupation of the Korean peninsula.
“Japan believes the issue of compensation was settled under a 1965 treaty.”
“India’s auto slowdown entered its ninth month in July as passenger vehicle sales fell 31 percent year-on-year to 200,790 units, data from industry body Society of Indian Automobile Manufacturers showed Tuesday.
“Domestic car sales were down 35.95 percent at 122,956 units as against 191,979 units in July 2018, according to the SIAM data.”
“Indian investors are awaiting stimulus measures from the government as a gloomy economic outlook adds to mounting credit market woes and raises fears defaults will spread.
“The government is planning measures to boost the economy and may announce some steps…”
“At the end of October, Jammu and Kashmir will cease to be a state of India. Last week, India’s parliament approved by a large majority the decision by the federal government to split the state into two union territories – Jammu and Kashmir, and Ladakh. Union territories have much less autonomy from the federal government than states do, and are essentially subject to Delhi’s direct rule…”
“The outlook is grim.”
https://www.bbc.co.uk/news/world-asia-india-49316350
“An estimated 50,000 protesters took to the streets of Moscow on Saturday, Aug. 10, in one of the largest protests in Russia since 2012. They rallied against the barring of opposition candidates from local elections next month and police crackdowns at recent rallies. 256 were detained in a march after the demonstration.”
https://www.themoscowtimes.com/2019/08/12/record-protests-rock-moscow-a66825
“Yevgeny Dubinin had never been to a political protest before. But he was so angry Moscow authorities had refused to register opposition candidates in the city council election that he couldn’t sit at home.
““They’re taking away people’s right to vote, telling them whom to vote for,” the 44-year-old business manager said on his way to a late-July demonstration on the capital’s main street, Tverskaya, that had been denied a permit by authorities.”
“America would “enthusiastically” support a no-deal Brexit, U.S. National Security Adviser John Bolton said on Monday during a visit to London.
““If that’s the decision of the British government, we will support it enthusiastically, and that’s what I’m trying to convey,” Bolton told reporters on the first day of his two-day visit to the British capital, according to the Guardian. “We’re with you, we’re with you.”
https://www.politico.eu/article/trump-envoy-us-would-enthusiastically-back-no-deal-brexit/
“Argentine President Mauricio Macri vowed on Monday to win a second term despite a surprisingly strong performance by the opposition in the primary election that set off a shockwave through markets, crashing the peso currency and sending stocks and bonds tumbling…
“The peso closed 15% weaker at 53.5 per U.S. dollar after plunging some 30% to a record low earlier in the day.”
“Brazil likely fell into recession in the second quarter according to a key gauge of economic activity that comes as policy makers grapple with high unemployment and weak investments as well as a global slowdown.
“The country’s economy activity index, which is a proxy for gross domestic product, fell 0.13% in the April-June period…”
“As Wall Street economists up the odds for a recession in the coming year, the bond market is sending its own scary warning about an economic downturn.
“Various parts of the yield curve have been inverted, but the traditionally watched 2-year to 10-year spread looks set to invert any day now, with the curve at its flattest level since 2007.”
https://www.cnbc.com/2019/08/12/bond-market-close-to-sending-biggest-recession-signal-yet.html
“Economies globally are showing signs of acute weakness and the next stage could be a worldwide recession, if Morgan Stanley is to be believed, in nine months from now.
“Escalation in trade tension between the two largest economies — US and China — is the chief factor nudging the world economy towards a recession.”
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