My apologies for the hiatus yesterday – work rather got on top of me. Today:
“OECD chief economist Laurence Boone wrote in a blog post: Trade disputes between the U.S. and China, Europe and other countries is causing some businesses to hold off on investing in new equipment or hiring, while U.S. manufacturing has fallen into recession despite President Donald Trump’s vows to revive the sector.
“An urgent response is required, failing which we run the risk of finding ourselves stuck in a long period of low growth, the brunt of which will be felt primarily by the most vulnerable,” Boone wrote.”
“A drastic shortage of liquidity in US funding markets has forced the Federal Reserve to intervene for a third consecutive day, resorting to measures last seen in the global financial crisis.
“The upheaval points to mounting stress in core parts of the US financial system and suggests that the Fed’s quarter point cut in interest rates this week did not go far enough to bring the bond markets back into equilibrium. At the very least it raises serious questions about the central bank’s monetary toolkit.”
“The Federal Reserve seems a lot more concerned about the state of the economy than it’s been letting on. The Fed lowered its target interest rate by a quarter point on Sept. 18, the second such cut since July – and the first reductions since the Great Recession more than 10 years ago.
“What is especially challenging now is that there seems to be little room for policymakers to respond if – or perhaps we should say “when” – a recession hits.”
“Brazil’s Central Bank has slashed interest rates to a record low for the second time in less than two months, as Latin America’s biggest economy struggles to grow.
“The bank cut its main rate to 5.5 percent from the previous historic low of six percent, citing risks of a “more intense slowdown in the global economy.””
“Buenos Aires, Argentina – More than 100,000 Venezuelans now live in Argentina. They have left one country in crisis only to find themselves in another mire…
“A persistent recession with high inflation, growing Argentine unemployment – and a 25-percent currency collapse in a single day last August – make finding a job incredibly difficult for most people who live in the South American country.”
https://www.aljazeera.com/ajimpact/venezuelans-argentina-economic-crisis-190918232818561.html
“A drought, cyclone-induced floods and an economic collapse have left Zimbabwe on the verge of its worst-ever food crisis.
“The southern African nation will probably run out of corn — its staple food — by January and about three out of five Zimbabweans won’t have enough to eat, according to the United Nations World Food Programme.”
https://www.moneyweb.co.za/news-fast-news/worst-ever-famine-threatens-zimbabwe-as-economy-collapses/
“UK retail sales fell in August as British shoppers bought fewer goods than in July… The UK economy contracted by 0.2 per cent in the second quarter under the weight of Brexit uncertainty and a global slowdown.
“Consumer spending has been a bright spot but today’s figures are a sign it is showing.”
https://www.cityam.com/uk-retail-sales-unexpectedly-fall-in-august/
“Germany should act sooner rather than later to revive its flagging economy, France’s finance minister said on Thursday, as he struggled to hide frustration with the pace of Berlin’s efforts to engineer a recovery.
“French policymakers are growing anxious as Germany, Europe’s largest economy, dithers over how to pull itself back from the brink of recession, and they want Berlin to do more with its budget surplus.”
“China’s economy is grinding to its slowest levels of growth in decades…
“China’s economy faces trouble from several different sectors, Nomura Research Institute chief economist Richard Koo wrote in a Wednesday report.”
“Marathon Asset Management CEO Bruce Richards said government bond yields trading at negative levels “is the most absurd thing central banks have done and it will blow up in their face,” at the CNBC Institutional Investor Delivering Alpha conference on Thursday…
“Richards said investors may be tempted to reap as much gains as they can from this year’s relentless rally in government bonds, but said it was a “fool’s game.””
“Further evidence was on full display Thursday that top central banks are doing little more than pushing on a string in an attempt to spark their economies by flooding the financial system with ever more cash. The European Central Bank’s offer to provide money to lenders free resulted in it handing out just $3.4 billion euros ($3.8 billion), far less than estimates of 20 billion to 100 billion euros, according to Bloomberg News.
“The result is a clear message from banks that there’s just no real demand for loans from their customers, no matter the cost.”
https://www.bloomberg.com/opinion/articles/2019-09-19/when-free-money-no-longer-appeals-watch-out
“World economic growth is “fragile” and “under threat,” former International Monetary Fund director Christine Lagarde says, and is over-reliant on the actions of central banks.”
Read the previous ‘Economic’ thread here and visit my Patreon page here.
