“The Trump administration slapped tariffs on roughly $110 billion in Chinese imports on Sunday, marking the latest escalation in a trade war that’s inflicting damage across the world economy. China retaliated.
“Face-to-face talks between Chinese and American trade negotiators scheduled for Washington in September are still happening “as of now,” Trump told reporters Friday before going to Camp David, the US presidential retreat.
““We’re going to win the fight,” he said.
“China has repeatedly decried US pressure tactics, with signs that its officials are girding for a prolonged confrontation.”
“The bitter trade war between China and the United States kept Asian factory activity mostly in decline in August, business surveys showed, strengthening the case for policymakers to unleash fresh stimulus to fend off recession risks…
““The broader picture for Asian exports remains very weak because of the impact of the U.S.-China trade war, which is continuing to escalate,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit.”
“South Korea’s exports extended their slump in August as an escalating feud with Japan adds to uncertainties for the economy already elevated amid the U.S.-China trade war.
“Exports fell 13.6% in August from a year earlier, a ninth consecutive month of contraction, data from the trade ministry showed Sunday.”
“South Korea is likely to post a negative inflation rate in the period of August to October this year… it seems that the South Korean economy is approaching deflation while showing no signs of improvement.”
“India’s economy had annual growth of 5.0 per cent in the April-June quarter, the slowest in more than six years, dragged down by weak consumer demand and private investments, government data showed on Friday…
“For April-June 2018, India reported 8 per cent growth… “Very clearly the slowdown has been much stronger than expected.”
“With every passing day, India’s economic indicators are turning a little bleaker. The situation is bad enough to warrant using the word “crisis,” arriving just as the government’s fiscal ammunition is spent…
“”On Sunday, the top six carmakers reported a 29% drop in August sales, stoking fears that the slowdown could get still worse.”
“Tens of thousands of demonstrators took to the streets across Britain and outside the gates of Downing Street in protest against Boris Johnson’s move to suspend parliament.
“Crowds brandished banners pledging to “defend democracy”, chanted “stop the coup” and waved EU flags in London in a bid to resist the parliament shutdown.”
“UK Factory output continues to fall, defying hopes of another boost from Brexit stockpiling and fuelling fears that Britain is heading for recession.
“Data from manufacturers’ body Make UK and accountants BDO due out this week will show no repeat of the stockpiling seen in the run-up to the original March 29 Brexit deadline, as companies use up parts instead. The survey will also show slumping confidence, falling domestic orders and shrinking profit margins.”
“…many Americans feel left out of the apparent boom. Rising costs and debt, stagnant wages, and high and rising inequality create a sense of a two-track economy, where the winners get richer and everyone else has to run faster just to stay where they are.
“Here are 10 charts that break down why people are struggling, even when the economy appears so strong.”
“Cash-strapped, South African utility Eskom is in deep financial crisis with billions of rand in irregular expenditure. But in a report its auditors say no action has been taken against officials implicated. The irregular expenditure is in addition to massive losses, escalating debt and maintenance costs amounting to hundreds of billions of rand.
“Audited financial statements tabled in Parliament recently painted a gloomy picture of a company that is battling to stay afloat.”
“Argentina’s government imposed capital controls to halt a slump in foreign currency reserves and the peso that has pushed the country to the brink of default…
“The announcement comes as Argentina’s currency crisis spirals out of control. About $3 billion drained out of foreign currency reserves on Thursday and Friday alone as the government struggled to repay short-term debt and slow the drop in the peso.”
“…I was overcome by a sense of dread. A decade of historically low interest rates has begun to warp our economy. As we learned to our collective horror during the 2008 financial crisis, a period of sustained low interest rates forces investors on a desperate search for higher yields, inflating asset prices and the risks of owning loans and debt of all kinds…
“All that risk is not hidden on the balance sheets of the big Wall Street banks, as it was during the 2008 financial crisis. But it doesn’t just disappear into thin air. Like the oxygen we breathe but cannot see, it’s all around us, in hedge funds, private equity firms, and pension funds and university endowments that have been investing in risky debt, in the form of corporate bonds and other securities, to the tune of trillions of dollars…
“There is plenty of additional risk hiding in the undisclosed obligations of private companies and in the “shadow banking system,” nonbank financial institutions that have sprung up in the past decade to hold the risk that the Federal Reserve insisted, after the 2008 financial crisis, that Wall Street avoid.
“So what would happen if interest rates did increase slightly, or if the economy dipped into a recession, and some of those overleveraged companies could no longer meet their interest payments? It wouldn’t be pretty.”
“Since December 31, 2018
“Negative-yielding debt in the Americas has fallen from $332.4 billion to $40.3 billion, a decline of $291.1 billion.
“Negative-yielding debt worldwide has risen from $8.3 trillion to $17.0 trillion, an increase of $8.7 trillion.
“30% of investment-grade (non-junk) debt now has a negative yield.
“This is of course an amazing bubble. But for now, there is no catalyst to pop it.”