“”I’m not sure the global economy is in a state where it’s going to be able to absorb [higher oil prices] if [they] stay elevated,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“No one knows how long higher oil prices will last or where the economy’s breaking point is. The point is: It’s awful timing…
“It could also handcuff central banks, which are cutting interest rates around the world to boost growth. Persistently low inflation has given central banks room to push rates lower. Higher inflation, meanwhile, might hamper their ability to continue adding stimulus.”
“…there are signs that Saudi production could be in trouble for an extended period of time. Two Saudi sources familiar with the kingdom’s oil operations told CNN Business that fully restoring production “will take weeks, not days.”
“The potential for further escalation between the United States and Iran, which it’s blamed for the attacks, also looms large.”
“The situation certainly poses risks for China, the world’s top importer of crude.
“Following the release of fresh data for August, analysts at Societe Generale pointed out Monday that the industrial sector is “losing momentum at an alarmingly rapid pace,” and expressed concern that weakness could spill over into consumer spending and the services sector. Higher oil prices, which would come as the price of pork soars, are the last thing the country needs.”
https://edition.cnn.com/2019/09/16/economy/saudi-attack-world-economy/index.html
“Parts of Wall Street’s debt securitisation engine are back running at levels not seen since the pre-financial crisis boom.
“Data group Dealogic’s indices of US securitisation activity show that issuance of collateralised debt obligations — structured products made up of bundles of bonds and loans — rose above its pre-crisis peak late last year and is currently back close to those levels this year.”
https://www.ft.com/content/482f7ba6-d884-11e9-8f9b-77216ebe1f17
““The shipments index has gone from warning of a potential slowdown to signaling an economic contraction [USA],” according to the commentary included in the report. “We see a growing risk that GDP will go negative by year’s end.””
https://www.ttnews.com/articles/cass-freight-index-signals-us-economic-contraction-years-end
“Between 2007 and 2012 the [US] government’s publicly held debt doubled as a share of the economy. That was partly due to the Great Recession, but even since then the debt has continued to mount.
“It now stands at its highest level since the Truman administration and is on course to eclipse the size of the entire economy in about a decade. At some point investors will abandon Treasury notes or demand much higher returns.”
https://thehill.com/opinion/finance/461477-tom-price-the-fiscal-crisis-at-hand
“With growth and inflation both slowing, the ECB cut rates deeper into negative territory last week and said it would start an open-ended bond purchase programme to depress already low borrowing costs…
““We judge that, if needed, we can further lower the deposit facility rate and, with it, the overnight money market rate,” said Philip Lane, ECB Chief Economist.”
“Britain’s household savings rate – a measure of how much households save from their disposable income – stands close to record low levels. Households have also been net borrowers for 10 quarters in a row, an unprecedented stretch in records dating back to the 1960s.
“Their lack of financial headroom could spell trouble if a downturn hits, whether triggered by events at home or abroad.”
“A prolonged shadow-banking crisis and hurdles in bankruptcy rules have left India holding the world’s worst bad-debt pile.
“Seeking to spur lending needed to revive economic growth from a six-year low, Prime Minister Narendra Modi’s government said on Aug 30 that it plans to merge smaller banks to create four new lenders that would hold more than half of the Indian banking industry’s assets.”
“A slowdown in India’s steel sector is spreading to medium and small enterprises, with several companies cutting production in response to lower demand…
“The steel companies are facing the heat from the slowdown in one of their biggest clients, the automotive industry. Demand for real estate has also been falling in a slowing economy and a liquidity crunch.”
“South Korean companies continued to suffer setbacks in their sales and profits in the second quarter amid slower economic growth and sluggish exports, central bank data showed Sept. 17.
“In the April-June period, the average sales of local companies shrank 1.1 percent from the same period last year, according to the data from the Bank of Korea.”
http://www.theinvestor.co.kr/view.php?ud=20190917000656
“The two-year-long economic crisis in Argentina has intensified in recent months, leaving even some middle-class families struggling to afford food… Inflation has topped 55 percent and 10 percent of the population has newly fallen below the poverty line this year.
“As government food aid to schools is growing more meagre, nearly 50 percent of Argentinian children are suffering from malnutrition and 30 percent of Argentinians overall.”
https://www.france24.com/en/20190916-crisis-argentina-we-don-manage-feed-ourselves-anymore
“For many years now, people in Zimbabwe have turned to one refrain over and over – when Robert Mugabe dies, things will be better. Mugabe was ousted from power in 2017, and now the longtime former ruler has died.
“But Zimbabwe’s new government has used many of the same repressive tactics that its longtime leader once did, and the country is once again in a deep economic crisis.”
https://www.npr.org/2019/09/16/761126871/why-zimbabwe-is-again-in-a-deep-economic-crisis
“Shares in African diamond miner Petra Diamonds hit an all-time low on Monday after reporting a net loss of $258.1 million for the year ending in June, compared to a $203.1 million-loss in 2018, amid challenging market conditions.
“The company, which has mines in South Africa and Tanzania, said the loss reflected an impairment charge of $246.6 million triggered by lower diamond price assumptions.
“Richard Duffy, who has been at Petra’s helm since April, said the diamond market was in its worst state since the financial crisis in 2008…”
https://www.mining.com/petra-diamonds-shares-hit-all-time-low-as-loss-widens/
“EM equities fell in August and lost more ground than developed market stocks amid mounting fears of a global economic slowdown.
“The US-China trade row intensified as both countries announced new rounds of trade tariffs, while an inversion of the US Treasury yield curve stoked worries that the United States could be headed for a recession. EMs registered portfolio outflows, and EM currencies declined against the US dollar.”
https://seekingalpha.com/article/4291705-august-ruled-global-economic-slowdown-trade-fears
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