“”For a second there the global economy was off to a slightly better start for 2020. The US and China finally inked an initial “phase one” trade deal that at least promised to pause hostilities for a while. That provided some much-needed respite for a world economy, which last year reached its weakest point since the global financial crisis…
“Enter the Wuhan coronavirus. We can only speculate what ultimate impact – both human and economic – the virus will have, depending on how far it ends up spreading.”
“Starbucks has closed half of its outlets in China to protect its staff and support government
efforts to contain the coronavirus. The coffee shop chain warned that the rapidly expanding infection is likely to affect its financial performance.”
https://www.bbc.co.uk/news/business-51276317
“Businesses are stopping staff travel to China and urging workers inside the country to stay out of the office…
“…as concerns grow about the continued spread of the coronavirus from the central city of Wuhan to the rest of China and beyond.”
“Airline companies including United Airlines and British Airways said they were cancelling flights to China…
“…as demand fell sharply and global companies told their employees not to travel due to deepening fears over the spread of a flu-like virus.”
“…the crisis over the coronavirus, which originated some 550 miles north, in the Chinese city of Wuhan, appears almost perfectly scripted to further agitate and compound the grievances, from allegations of an inept government to meddling from Beijing, that have exploded in Hong Kong over the past eight months.”
““The Fed is in a uniquely uncomfortable position because the odds are very good that the economy will weaken as the year progresses and the markets will start to drop,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics.”
https://thehill.com/policy/finance/480357-fed-walks-2020-tightrope-on-rates
“Banks are rushing to offer investors synthetic collateralized debt obligations for the first time since the financial crisis, International Financing Review reported Friday.
“Years of low interest rates have led wealth managers to sink cash into managed collateralized synthetic obligations, a kind of synthetic CDO that uses tranches of credit default swaps tied to corporate debt, according to IFR.”
“Have bankers no shame? In Britain, at least, it appears not. Eventually, that could hurt the entire industry. Starting in April, the big banks want to charge overdraft borrowers a staggering 40% a year in interest.”
“Six eurozone banks have fallen below the European Central Bank’s capital requirements and been told to take action to fix the shortfalls, underlining the continuing fragility of Europe’s banking sector.”
https://www.ft.com/content/78ea7942-41b3-11ea-a047-eae9bd51ceba
“African countries have loaded up on dollar debt, leading some to worry that a tightening of global financial conditions could trigger borrowing problems in coming years.
“In the decade through 2019, debt levels in sub-Saharan countries excluding South Africa have risen 23 percentage points to around 50% of gross domestic product…”
https://www.wsj.com/articles/africa-debt-boom-may-store-up-trouble-for-the-future-11580216277
“The drought is causing Australians to pay more at the supermarket.
“The price of fruit had the biggest spike – 6.8% – which was also due to lower seasonal supply.
“Overall, food prices were up 1.3%. Pork (4.7%), beef and veal (2.9%), and cheese (2.4%) had the next biggest price rises.”
“The International Monetary Fund on Tuesday urged policymakers to keep a close eye on financial vulnerabilities such as rising debt levels that could pose medium-term risks to the global economy and said further monetary easing was not the answer.”
“…what the experiment [with negative rates] has shown is that once the deposit rate reaches the lowest that banks are willing to go, a central bank can’t further reduce the base rate into negative territory to encourage cheaper lending. In other words, further reductions become ineffective at stimulating the economy.”
“Undoubtedly, the world economy is in a special historical period. The global economy is still in the shadow of the crisis which broke out more than 10 years ago. Economic growth has been sluggish for a long time, the level of debt remains high, negative interest rates are growing, the gap between the rich and the poor continues to widen…
“The financial and economic crisis in Western countries is gradually turning into a serious social and political crisis.”
https://www.globaltimes.cn/content/1177928.shtml
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