I usually try to lead with a story related to the global economy in its entirety but the situation in Hong Kong is so bananas now that it is worth focusing on, particularly as Hong Kong is a key hub for international finance and a political flashpoint between China and the US:
“Salvos of tear gas Thursday heralded the start of Hong Kong’s fourth day of continuous, territory-wide unrest and transport disruption as anti-government protesters escalated their efforts to force political concessions from the Beijing-backed government. Students also erected defenses at university campuses, stockpiling homemade weapons.
“Early morning volleys of tear gas were fired near the Polytechnic University, where police came under attack from students armed with bows and arrows…
“Commuters meanwhile endured yet another morning of cancelled buses and trains, and gridlocked traffic, as protesters blocked roads and hurled objects onto railway tracks. Many stations have been heavily damaged by protesters, and the station serving CUHK has been virtually destroyed…
“In scenes that are now worryingly common, a mob beat up an elderly man for arguing about the protests. There were also reports of pro-government gangs in a northern suburb roving through the streets and attacking young people.
“The deteriorating situation has prompted the government to draft a batch of correctional services officers as special constables, in order to relieve the burden on a desperately stretched police force.
“Citing unnamed sources, China’s state-backed Global Times also said Thursday that the Hong Kong government was preparing to announce a curfew in response to the unrest.”
“Cracks are starting to emerge in Hong Kong’s money markets, as traders speculate the local dollar’s resilience to increasingly violent protests won’t last.
“Hong Kong stocks were already showing signs of stress, losing 5% over the past week. Now, liquidity conditions in the foreign-exchange market are the tightest since the late 1990s, or the aftermath of the Asian financial crisis. Interbank rates are climbing — making funding costs more expensive for banks — while a gauge of expected swings in the Hong Kong dollar is near its highest in a month.”
“Growth in China’s industrial economy fell sharply in October, as a broad-based slowdown in manufacturing was again clear in figures released on Thursday…
“…while the manufacturing slump has dominated headlines this year, the sag in investment will be of real concern to policymakers in Beijing.”
“Reports of a spate of bank runs and regulators scrambling to contain the mess underscores the stresses in the world’s largest banking sector as slowing growth, weak exports and crimped cash flows pressure the ability of borrowers to service China’s very large mountain of debt…
“Jitters about the financial health of banking minnows in the provinces of Liaoning and Henan are just the latest data points highlighting the pressures on China banks.”
“Trump is making sure that the Hong Kong Human Rights and Democracy Act doesn’t see the light of day. This bill – already approved by the Senate Foreign Relations Committee – would lead to sanctions against those in Beijing responsible for the Hong Kong crackdown.
“It’s been stopped in Congress precisely because its passage would put the nix on any trade deal between the U.S. and China. So right now, the Hong Kong protests are being completely hijacked by the trade war, which is also devastating Hong Kong.”
“The South Korean economy is entering a phase where interest rates, inflation and growth rates are no longer growing. The nation used to be concerned of high growth and inflation as a result of its high economic growth, but now is fearful of deflation.
“South Korea is now facing an economy where businesses are no longer willing to take out loans from banks, no matter how low interest rates are.”
“South Korea’s $29 billion hedge-fund industry just saw its worst withdrawals ever, after its largest fund froze redemptions from investments on illiquid assets.
“Outflows from local hedge funds reached a record 700 billion won ($598 million) in the past two months…”
“Japan’s economy slowed sharply in the third quarter as overall exports continued to fall amid trade tensions..”
“In 2014, oil prices fell once again. At the same time, Western countries began introducing sanctions to push back against the Russian government’s actions in Ukraine, which further deterred investors.
“Unlike the other crises, this one was not followed by a rapid recovery. Oil prices remained low, sanctions only became more severe, and investors from Russia and the rest of the world alike directed their funds elsewhere.”
“Almost all the oil and gas exporters in Central Asia and the South Caucasus devalued their currencies following the oil price slump in 2014.
“Azerbaijan’s devaluation was particularly painful; the central bank was forced to devalue the manat twice in 2015. Kazakhstan was forced to do the same. Uzbekistan initiated a 50 percent devaluation in September 2017 at the start of its economic reforms.”
“Lebanese student Fatima Jaber’s family is struggling to pay off multiple loans with double-digit interest rates… like many Lebanese, she thinks the system is broken.
“The loss of trust is eroding liquidity in the banking sector, increasing concerns that banks may not be able to help the government fund high budget and current account deficits.”
Lots of lesser trade wars, like Japan v. Korea and Ghana v. Nigeria:
“The Ghana Union of Traders Association (GUTA) has been shutting down Nigerian-owned businesses and Ghanaian officials went as far as closing almost 70 businesses belonging to Nigerians on November 11, 2019.
“Police officers and the Nigerian Mission in Ghana prevented a clash between GUTA and Nigerian Union of Traders Association in Ghana (NUTAG) members.”
“Indian economy may be heading to its worst quarterly GDP growth performance since the 2008-09 global financial crisis period that shook economies across geographies.
“That was a time when the whole world was taken by surprise by the ripple effects of Lehman crisis… Even for the government’s economists, there is no clear understanding as to what is causing a free fall in the growth.”
“It’s been over a dozen years since Susanne LeClair of West Palm Beach, Florida, was first diagnosed with cancer, she’s been fighting ever since. Now she, like many other Americans facing life-threatening illness, is bankrupt despite having health insurance.”
“Banks and other short-term dollar borrowers are becoming ever more reliant on the $3.2 trillion-a-day foreign exchange swap market, data shows, leaving them dangerously exposed should U.S. lenders stop feeding the system, even if only temporarily.
“Swaps users had a scare in September, when the U.S. Federal Reserve had to pump cash into markets as rates in the $2.2 trillion U.S. “repo” market spiked and spilled into FX swap markets, sending the premium to borrow dollars shooting higher.”
“Asked if he could see any green shoots in parts of the global economy right now, Arend Kapteyn, the global head of Economics and Strategy Research at UBS, told CNBC’s Joumanna Bercetche that “we can’t see them.””