“The global economy is set to dive deeper into the realm of negative interest rates as central banks look for new ways to spur growth amid signs of a looming slowdown.
“The issue hit a fever pitch Wednesday morning as President Donald Trump tweeted that the Federal Reserve should lower interest rates “to ZERO, or less,” for the US to refinance its debt.
“The tweet puts the onus further on the Fed to lower rates, something most economists already expected the central bank to do — though not to the extreme degree Trump appears to want.
“The idea that some investors have become so risk averse that they’re willing to pay money to store capital in a safe-haven investment like a bond suggests a bleak outlook for the global economy.”
“The European Central Bank meeting tomorrow (Sept. 12) is one of the most significant in recent memory—not because it may cut rates, but because it might not.
“Taking a neutral stance will reveal the dirty secret in monetary policy: Central bankers can’t prevent a recession.”
“…lorries could have to wait up to two and a half days to cross the English Channel and British citizens could be subject to increased immigration checks at EU border posts.
““Certain types of fresh food supply will decrease,” it said. “There is a risk that panic buying will cause or exacerbate food supply disruption.””
“Europe’s largest economy is notoriously wary of borrowing. But it’s also on the brink of recession… The possibility of major German spending to upgrade infrastructure and tackle the climate crisis is generating lots of excitement.
“Yet experts caution that the country’s lawmakers, determined to maintain a balanced budget, are unlikely to approve the kind of flashy spending package that could give the region a jolt.”
“A 45-year old Turkish man on Wednesday set himself on fire in capital Ankara after shouting that he was unemployed and hungry…
“Witnesses in Ankara’s Kızılay district informed the police, who came and intervened using fire extinguishers, the news site said… The jobless rate is at 13 percent as of April, according to latest figures of the Turkish Statistical Institute.”
“Stretched finances are forcing rural households [in India] to live frugally. What may be a necessity in urban households, like a bar of soap or a tube of toothpaste, has attained premium status in rural India…
“According to Jain, over the past two months, daily orders have plunged from ₹70,000 to ₹25,000.”
“The Chinese auto market is crashing. Data from the Chinese Association of Auto Manufacturers show the passenger car market there contracted 6.9% in August and has fallen 11.0% for the year-to-date period.
“August 2019 marked the 14th consecutive decline for the Chinese auto market…”
“China’s central bank will stick to its guns to lower interest rates and boost bank liquidity to encourage more lending and support the economy despite skyrocketing pork prices across the country, analysts said.”
“Business confidence among Japanese manufacturers has soured to hit the weakest level in 6-1/2 years, the Reuters Tankan poll for September showed, underscoring fears that the U.S.-China trade war is undermining Japan’s export-led economy…
“The Reuters Tankan sentiment index for manufacturers fell for a fourth straight month, reaching minus 7, the lowest point since March 2013.”
“South Africa’s unsecured lending boom has left 40% of borrowers in default and millions of people in a debt trap, according to fund manager Differential Capital.
“About 7.8 million of the country’s 60 million residents have taken out a combined 225 billion rand ($15 billion) of loans without collateral, mostly for short-term needs such as furniture and urgent family care, the Johannesburg-based firm said in a report.”
“Argentina’s central bank late on Wednesday announced further currency controls in an effort to tame speculation and stem a spiraling debt crisis in Latin America’s third largest economy.
“The new measure requires anyone purchasing foreign currency to present a sworn oath promising to wait at least five days before using it to purchase bonds.”
“Cuba’s president warned Wednesday night that the country faces a looming energy crisis due to lack of diesel fuel, but he hopes to avoid blackouts in coming days.
“President Miguel Diaz-Canel blamed U.S. sanctions for shortages and warned Cubans to prepare to see immediate effects from the lack of fuel.”
“Ratings agencies gave a cautiously positive assessment on Wednesday of Mexico’s $5 billion cash injection into state oil company Pemex, but it did not dispel the risk of another downgrade of its bonds to speculative grade, or junk, in the next few months…
“Although it noted that a successful transaction would improve Pemex’s liquidity, Fitch said it viewed government support as “moderate” given Pemex’s heavy tax burden.”
“Global oil demand continues to see downgrades from major energy forecasters, with several downward revisions in just the past week…
“The point is not to pick on the EIA – just about every major forecaster has been forced to dramatically slash their numbers – but rather the global economy has slowed down by much more than expected. If the roughly 890,000-bpd demand growth figure comes to pass as the EIA now predicts, it would be the first time since 2011 that oil demand grew by less than 1 mb/d.”
“…forget about contraction, there is a recession which is coming and one should fasten the seatbelts because turbulent times are coming and the fall could be bigger than what we have seen even in 2008…
“Capital expenditure is falling globally. The global PMI is below 50, which would suggest that the world is headed towards recession. We are seeing the US ISM fall below 50, which increases the probability of recession significantly. We are also seeing Germany, China essentially in recession. We are seeing manufacturing, global trade contract everywhere. All major countries are seeing global exports decreasing. We are seeing big ticket items decreasing as well. This is a lot of leading indicators that suggest there is trouble ahead.”