““We live in a world where we have been hit by waves of social unrest, populism, nationalism, asset bubbles, trade wars, currency wars — we have a chaotic environment,” economist Vikram Mansharamani said, adding that the root causes for all of these include oversupply in the field of technology and energy, and ageing of the world’s largest economies that prompt consumers to spend less.
“When we put these together we have global deflationary pressures,” he said. “So in a world where there is not enough demand and too much supply, countries compete using currencies to boost exports, resulting in a winner-take-all market, inequality and social unrest.”
“This is tailed by nationalism and populism, with people being led to assign blame, followed by protectionism and taxes on imports, Mansharamani said…
““The global economic uncertainty does not limit to just US-China, but ripple effects extend into US-Europe, Japan-Korea, which are paralysing corporate boardrooms of multinational companies as they are no longer investing the way they were,” Mansharamani said. “Global supply chains are shifting away right now, companies are saying that they cannot have sole supplier risk in China or others.”
““So when we put all these pieces together, it shows that in the next 24 months there is a high propensity or high probability that we will face the heat of a recession,” he said, adding that these signs, which usually come 12-18 months before we have a recession, show that the economy is within 36 months of a downturn.”
https://gulfnews.com/business/markets/is-the-world-heading-towards-an-economic-recession-1.68369186
“A dairy farmer cannot plan for the future because the price paid for his milk has been held hostage by Brexit; a customs broker is cautiously preparing for a big expansion of business, but fearful if he makes the wrong call; a tech executive in London whose payroll relies on European Union workers wonders how she will fill her job vacancies; and two building cleaners, whose livelihood has been rocked by outsourcing, dread the loss of job protections built on rules from the Continent.”
https://www.nytimes.com/2019/12/10/business/brexit-jobs.html
“French commuters experienced a chaotic journey getting to work on Monday as public sector workers entered a fifth consecutive day of nationwide strikes.
“The traffic lines totaled more than 500 kilometers (310 miles) getting into the French capital Monday morning… Nationwide, public sector workers have protested against government plans to update the pension system since Thursday.”
“Namibia’s economic crisis, lack of jobs and the crippling drought are increasing the risk of suicidal behaviour, experts have warned on Monday.
“Statistics released by the Namibian police Friday show that 373 people committed suicide in the first nine months of this year.”
http://www.xinhuanet.com/english/2019-12/09/c_138617730.htm
“South Africa’s state power company intensified rolling blackouts to a record, signaling a deepening crisis at the debt-ridden utility and raising the risk of a second recession in as many years…
“The utility is curbing power for a fifth straight day as it struggles with breakdowns at plants and heavy rains that have soaked coal used as fuel.”
“Six weeks since Saad al-Hariri resigned as prime minister, prompted by protests against the ruling elite, the financial crisis is generating concerns for Lebanon’s stability:
“banks are enforcing capital controls, dollars are scarce, and the Lebanese pound has lost a third of its value on a black market.”
“UN representative in Iraq Jeanine Hennis-Plasschaert is calling for action against what she called “pervasive corruption” in the government, as the death toll from ongoing, massive protests has exceeded 400 since early October…
“Protesters say rampant government corruption is to blame for severe unemployment, grossly inadequate public services and unwanted Iranian influence on security and politics.”
https://www.al-monitor.com/pulse/originals/2019/12/iraq-protests-corruption.html
“Global rating agency Moody’s on Monday said pressure on Indian finance companies continues to build up, with some banks heavily exposed to non-bank credit providers, hinting that India’s NBFC crisis is far from over, even after a year since the troubles began when a major shadow bank IL&FS Group abruptly defaulted.”
“About 30 per cent of respondents in a survey by the Hong Kong Retail Management Association said they’ll cut jobs while 43 per cent said they can’t continue to operate beyond six months.
“”If cash flow doesn’t improve and landlords don’t help, there will be a wave of layoffs and business shutdowns,” Ms Annie Tse, the association’s chairwoman said in a press briefing on Monday (Dec 9). “This will be the worst ever in history.””
“China’s consumer prices rose at their fastest pace in almost eight years in November as food costs surged but producer prices declined for the fifth straight month, complicating policymakers’ efforts to boost demand as economic growth slows…
“However, domestic demand stayed subdued as core inflation – which excludes food and energy prices – showed only modest pressure.”
“Following a series of rate cuts by China’s central bank, the corporate bond market has been cheered by declining yields, but only state-owned enterprises seem to have benefited from lower borrowing costs and private companies are still struggling… The number of bond defaults by Chinese onshore companies just broke another record this year.”
“The first problem Fernández will have to face is the renegotiation of Argentina’s debt, both external debt held with private bondholders and that owed to the International Monetary Fund (IMF).
“For this task, he has chosen Martín Guzmán as his economic minister, who considers it “imperative” that payments for both capital and interest are restructured.”
“…the mobilizations in South America took many by surprise.
“Over the past three months, virtually every Andean nation…
“…Venezuela, Ecuador, Peru, Bolivia, Chile and Colombia — has erupted into mass protest.”
http://www.brinknews.com/why-is-latin-america-aflame-with-protests/
“The [US] trucking “bloodbath” of 2019 is taking another remarkably dire turn as the year draws to a close. Indianapolis-based Celadon, a truckload carrier that grossed $1 billion as recently as 2015, filed for bankruptcy on Dec. 9. It’s poised to be the largest truckload bankruptcy in history, leading industry publication FreightWaves reported on Friday.”
https://www.businessinsider.com/celadon-trucking-bankrtupcy-truckers-stranded-2019-12?r=US&IR=T
“Tullow Oil has been plunged into crisis after it ousted its boss, slashed production forecasts and axed the dividend – sending shares crashing to a 20-year low…
“It will trigger massive paper losses for thousands of retail investors, who hold around 15pc of Tullow’s stock between them.”
https://www.telegraph.co.uk/business/2019/12/09/tullow-shares-crash-cutting-forecasts-ousting-boss/
“This is a Google Trends chart on searches for the word “recession” that I published in a column over the weekend. It shows that fears suddenly spiked in midsummer to their highest level since the last actual recession:”
“Interest rates are ultra-low in part because global investors are starved of “safe” assets that will still payout in the event of a sharp downturn or economic catastrophe. But can governments, in fact, provide that insurance for free if there is a risk that interest rates will rise in the next major systemic crisis?
“A recent International Monetary Fund study of 55 countries over the last 200 years showed that although economic growth exceeded interest rates on government debt almost half the time, this was not a good predictor of whether the surveyed countries were safe from interest-rate spikes in a crisis.
“Modern economies have many important uses for debt. But it is never a risk-free option for governments, which is why it should be taken on and managed wisely, even when rock-bottom borrowing costs prevail.”
https://think.ing.com/opinions/government-debt-is-not-a-free-lunch/
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