“[US] Unemployment’s at a half-century low. Inflation is near its target of 2%. And, at about 125 months, the U.S. is charting its longest economic expansion since at least the 1850s.
“Look under the hood, however, and things look very troublesome.
“Numerous trade wars have cost U.S. companies, farmers and consumers dearly. The manufacturing industry – once America’s job engine and ostensibly the sector the trade war was supposed to support – is seeing its worst year since 2009.
“And looking abroad, the situation is even worse, with the global economy slowing and the International Monetary Fund warning there’s little ammunition left to fight a recession…
“A key cause of the 2008 financial crisis was too much debt in the housing market, much of which ultimately went bad.
Today, the problem is in corporate America. Since 2008, when the Fed drove its target interest rate to a record-low 0.25%, markets have been flooded with cheap money. That was too much to resist for U.S. companies, which went on a borrowing binge.
“All American companies are currently sitting on a record US$15.5 trillion in debt, equivalent to about two-thirds of U.S. GDP. Unfortunately, this debt was not primarily used to finance expansion and growth but more commonly to jack up stock prices through dividends, stock buybacks and acquisitions.
“The problem will come when the party stops – when interest rates begin rising and companies, particular the ones that took more risks, can’t refinance or pay back their debts. This is what turns a credit boom into a financial crisis, as happened in 2008.”
“Canada’s $1.7 trillion economy has long been closely tied to the ebbs and flows of global trade. …
“Export shipments grind to a halt, stunting already weak growth. Fallout may chop a quarter point off GDP in only three weeks.”
“A curfew has been imposed in Bogota following a second day of anti-government protests in the Colombian capital.
“At least three people died in the demonstrations in the Valle del Cauca, in the western part of the country, according to a statement issued on Friday by Colombia’s Minister of Defense Carlos Holmes Trujillo.”
“Brazilian President Jair Bolsonaro said on Saturday his government is alert and prepared for any possible social unrest after weeks of protests that have sent shockwaves across the region in recent weeks, but added he was not concerned…
““These are not demonstrations, they are acts of terrorism,” Bolsonaro said.”
“On the sidelines remain the majority of the world, particularly in poor regions such as Latin America.
“Today, our continent faces the impossible task of becoming competitive on a global scale with an absolute lack of infrastructure, limited credit, cramped capital investment for decades, and galloping inequality that has given birth to a generation of young people stuck in the poverty trap…”
“One year after the launch of the Yellow Vest protest movement in France, their compatriots in Reunion Island are still mobilised.
“FRANCE 24 reports from a roundabout in the city of Le Tampon, where protestors live at a makeshift camp and continue to denounce a poverty rate higher than that of mainland France.”
“Security forces fired tear gas early on Monday amid confrontations in central Beirut between supporters of Hezbollah and Amal, and demonstrators protesting against Lebanon’s political elite.
“Lebanon has faced five weeks of anti-government protests, fuelled by anger at corruption…”
“Iraqi security forces have opened fire on protesters in southern Iraq, killing at least five people, amid ongoing anti-government demonstrations.
“At least two people died and some 50 others were injured near the Gulf port city of Basra on Sunday. Late on Saturday, at least three protesters were killed and more than 40 others injured in Nasiriya.”
“Turmoil in Baghdad, paralysis in Beirut and flames of unrest in Tehran; it has been a bad few months for Iran at home and elsewhere in the Middle East, where more than a decade of advances are being slowed, not by manoeuvrings on battlefields or legislatures – but the force of protest movements.”
“Hong Kong’s pro-democratic parties swept the board in highly anticipated local elections seen as a barometer of public opinion after nearly six months of increasingly violent protests that have polarised the semi-autonomous Chinese territory…
“As of 12pm (04:00 GMT), pro-democracy candidates had won a clear majority with 390 seats of the 452 district council seats, according to local broadcaster RTHK.”
“The cost of living in China has outstripped the 3% government target for the first time in a decade, and a big part of the problem is the soaring price of pork, which is being driven up by a widespread outbreak of African swine fever.
“Pork is a big deal in China…”
“A troubled Chinese state-own firm is giving bondholders a stark choice on $1.25 billion of dollar bonds: take a haircut of as much as 64% or accept delayed repayment with sharply reduced coupons.
“Tewoo Group Corp., which is owned by the Tianjin local government, proposed the exchange/tender offer on Friday on three dollar bonds due to mature over the next three years as well as a perpetual note.”
“Bundles of yuan notes were stacked high behind the counters of branches of Yingkou Coastal Bank earlier this month, as the northeast China lender fought off a run on deposits while onsite government officials battled rumors of a funding crunch.
“Yingkou was the latest small bank to have its deposit-reliant funding base undermined by depositors, spooked by the funding crunch that led to the shock state-led rescue of tiny regional lender Baoshang Bank.”
“Tens of millions more pensioners and savers around the world are facing the same retirement insecurity, as plunging interest rates since the financial crisis wreak havoc on the funding of schemes.
“As average life expectancy increases, pensions have become a defining political issue in countries as diverse as Russia, Japan and Brazil.”