“A significant global upturn will remain elusive this year as many economies still face an array of daunting risks…
“The global economy in 2019 may have been near its weakest since the financial crisis thanks to trade protectionism and political uncertainty, but world stocks had a blowout year with several indexes repeatedly setting record highs.
“With easy policy from central banks set to continue, that split between markets and events on the ground may extend into this year, according to surveys of over 500 economists covering 46 major economies conducted Jan. 10-22.”
“Corporate America is awash in junk debt, and the situation could deteriorate substantially… Moody’s Investors Service warned Thursday that default risk is on the rise for the nearly $1.2 trillion of speculative-grade loans, bonds and various related instruments maturing from 2020-24.
“While low interest rates have allowed spec-rated companies to continue to roll over all that paper, a slowdown in the economy or a reversal in Federal Reserve monetary policy could pose problems.”
“George Soros said that the U.S. economy could be headed for calamity as a result of President Donald Trump’s efforts to juice American business.
“”The stock market, already celebrating Trump’s military success, is breaking out to reach new heights,” he said. “But an overheated economy can’t be kept boiling for too long.””
“The trouble currently is that global short-term interest rates are still close to, or below zero, and cannot be cut much more, which has deprived central banks of their main lever if a recession strikes.
“The biggest challenge the Fed faces currently is how to deal with a recession.”
https://seekingalpha.com/article/4318544-yes-rates-are-still-going-to-zero
“Danielle DiMartino Booth, CEO of Dallas-based research firm Quill Intelligence, says the Federal Reserve is on the cusp of enacting QE4, or may already be there…
““We’ve surpassed the $400 billion mark,” she said in a phone interview. “They call it ‘not QE’ because it’s maturities of 12 months or less and therefore presupposed to roll over within 12 months.”
“This all comes, Booth believes, amid a weakening economy.”
“The incoming Bank of England governor has admitted that he is concerned about how ill-prepared the UK is for a prolonged fall in the stock market or house prices.
“Andrew Bailey, chief executive of the Financial Conduct Authority, the City regulator, said that increased exposure to asset values had been accompanied by declining understanding of the fallout from a decline in prices, saying that the issue was “one of the things that worries me most”.”
“The profitability of UK companies has dropped to a 10-year low, according to official figures that came as surveys showed a fall in retail jobs, a surge in profit warnings, a slowdown in pay growth and a fragile outlook in the construction sector.”
“A desperate international campaign has started to save a group of starving lions at an impoverished zoo in Sudan. Images of the skeletal animals living in rusted cages have gone viral as people seek ways they can be saved…
“The whole country is gripped by economic crisis, with soaring food prices triggering mass protests last year which ultimately forced autocrat Omar al-Bashir to step down last April.”
https://metro.co.uk/2020/01/23/zoo-staff-left-no-option-use-cash-feed-animals-12108290/
“In 2019, [Zimbabwe’s] economy declined for the first time in a decade by more than 6,5%. The United Nations (UN) has added its voice to the Zimbabwean economic crisis by pointing that the economy is in severe distress…
“Unresolved economic challenges include low levels of confidence, weak investment, high public debt, power supply gaps, uncontrolled inflation, and decline in aggregate demand, fuel and foreign currency shortages.”
https://www.theindependent.co.zw/2020/01/24/unrestrained-money-supply-growth-sinking-zimdollar/
“Lebanon’s new government is looking to secure $4-5bn in soft loans from international donors to finance purchases of wheat, fuel and medicines, according to local media reports, amid the country’s worst economic crisis in decades.”
“The plight of [India’s] real estate developer and suppliers is far from the end.
“Despite government’s recent measures to revive the sector by injecting liquidity into the system and easing norms for unfinished projects, both sale and new launches plunged further in October-December quarter.”
“…central banks are now in the business of picking winners and losers in the corporate world. They’re likely to be embroiled in this for a long time: even if they did abandon QE, they are buying assets with lifespans of over 30 years in some cases.
“As the Bank of Italy has admitted, the possibility of some of these companies going insolvent creates financial risks for the whole eurozone system.”
“The tools these central banks have relied on for years aren’t working. Inflation is stubbornly below their targets, and economic growth is sluggish.”
https://www.marketplace.org/2020/01/23/central-banks-are-searching-for-new-tools/
“The state of global geopolitical tensions is high, and this is having an impact on the global economy, Antonio Guterres, Secretary-General of the United Nations, told CNBC’s Sara Eisen on “Squawk on the Street” from the World Economic Forum at Davos on Thursday.
““It’s the highest I have seen since taking office at the UN,” the Secretary-General said…”
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