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Somewhat slim pickings today.

My sense, scouring the news, is that the world is holding its breath, waiting to see whether a major conflict will erupt, waiting to see if the most massive infusion of central bank stimulus since the previous global financial crisis will pull the global economy out of its tailspin…

There is a weird feeling of anticipatory stasis.


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Bank of England Governor Mark Carney said central banks might not be able to fight off a sharp economic downturn because their monetary policy arsenals are still depleted from the global financial crisis a decade ago, the Financial Times reported.

““It’s generally true that there’s much less ammunition for all the major central banks than they previously had and I’m of the opinion that this situation will persist for some time,” Carney told the newspaper in an interview published on Tuesday.

“If there were to be a deeper downturn, (that requires) more stimulus than a conventional recession, then it’s not clear that monetary policy would have sufficient space.””

https://www.reuters.com/article/us-britain-boe-carney/central-banks-might-struggle-to-fight-deep-downturn-carney-idUSKBN1Z62IO


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Talks between the French government and unions aimed at ending a 34-day transport strike failed on Tuesday to break the deadlock over a planned pensions overhaul, one of the most hotly contested reforms launched by President Emmanuel Macron…

“On Tuesday, the strike hit oil refineries following calls by the CGT for a blockade of petrol shipments.”

https://www.thelocal.fr/20200107/talks-fail-to-end-french-pensions-deadlock-as-both-sides-refuse-to-budge


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German industrial orders fell unexpectedly in November on weak foreign demand and a lack of major contracts, data showed on Wednesday, suggesting that a manufacturing slump will continue to hamper overall growth in Europe’s largest economy…

“Demand from other countries fell 3.1%.”

https://uk.reuters.com/article/uk-germany-economy-industrial-orders/german-misery-continues-as-industrial-orders-fall-unexpectedly-idUKKBN1Z70Y1


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“The Indian economy is expected to grow by 5 per cent this financial year, the slowest pace since 2008-09 when growth sank to 3.1 per cent as a result of the worst global financial crisis.

“The Narendra Modi government, which has stubbornly refused to acknowledge the gravity of the economic crisis this year, received another reality check on Tuesday when the Central Statistics Office came out with its first advance estimates.”

https://www.telegraphindia.com/business/economy-worst-alert-in-a-decade/cid/1733945


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China has appointed a new envoy to Hong Kong in a sign of Beijing’s growing frustration at the ongoing protests in the financial hub.

“Luo Huining, a previous governor of Qinghai province, has replaced the previous head of the liaison office, the Chinese government’s most important office in the special administrative region.”

https://www.cityam.com/beijing-appoints-new-envoy-to-hong-kong-as-frustration-grows-over-protests/


What is the “normal” level of interest rates? How much is a fair, just or “proper” return on your cash? “Your answer might well depend on when you grew up.”

https://www.telegraph.co.uk/business/2020/01/08/eight-centuries-history-tell-us-interest-rates-will-get-lower/


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Companies around the world have racked up an immense amount of debt. One worry is that these borrowers could default on some part of the $3 trillion in risky borrowing, setting off a wave of losses for banks and investors. The other worry is that officials aren’t sure who exactly owns a sizable swath of this debt…

A [global] slowdown half as severe as the 2008 collapse could put some $19 trillion of debt at risk, meaning companies’ earnings aren’t sufficient to cover their interest expenses, according to the IMF. That’s 40% of the world’s corporate debt in major economies.”

https://qz.com/1780597/risky-leveraged-loans-risks-are-growing-regulators-warn/


Read the previous ‘Economic’ thread here and visit my Patreon page here.