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“…since the last recession, the interest rates have not recovered to the level required to tackle a new downturn…

In addition, government debt across the world is at record levels. The average debt for advanced economies stands at more than 100% of the GDP, while in China it is through the roof at 300% of the GDP (mostly because of its panicked borrowing during the 2008 financial crisis to support massive fiscal stimulus valued at roughly 12.5% of its GDP). Italy, with an insurmountable government debt valued at roughly 130% of its GDP, is a ticking time-bomb.

“In this interconnected world, it only takes one weak link to radiate out an economic weakness that spreads globally.”

https://timesofindia.indiatimes.com/blogs/perspectives-on-global-political-economy/economic-panics-are-hidden-until-they-are-not-the-next-recession-and-potential-policy-responses-with-central-bankers-backs-against-the-wall/


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It sure looks like a fourth round of quantitative easing or “QE,” and yet Fed Chairman Jerome Powell specifically stated early on, “In no sense is this QE.”

“The Fed’s Kaplan, however, referred to it as a “derivative of QE” that may have an effect on risk assets, and noted that it was similar to QE but on the short end of the curve. Economic advisor Larry Kudlow recently referred to it as, to use his word, “basically” QE.”

https://www.nasdaq.com/articles/the-curious-case-of-qe-2020-01-30


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An exceptional decline in imports to the United States helped keep GDP growth north of 1% in the fourth quarter of last year

“The percent decline in imports to the U.S. totaled a whopping 8.7%, the single largest quarterly decline in the value of goods and services purchased from foreigners in over 10 years.”

https://www.cnbc.com/2020/01/30/bid-decline-in-imports-helped-keep-gdp-above-1percent-in-the-fourth-quarter.html


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Mexico’s economy entered a recession in 2019, according to preliminary fourth quarter data released by the country’s statistics institute…

“A report by Alfredo Coutino of Moody’s Analytics Thursday noted that it was the first annual contraction since the 2009 recession.”

https://www.japantimes.co.jp/news/2020/01/31/business/economy-business/mexicos-economy-entered-recession-2019/#.XjPr9Gj7TIU


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Argentina’s Buenos Aires province and its creditors are at a cliff edge in bond restructuring negotiations that could set the tone for the country’s larger $100 billion debt talks.

“Holders of a 2021 bond have until 1 pm (1600 GMT) on Friday to agree to a proposal delaying a $250 million principal repayment until May 1. If they do not agree it would leave the province days away from falling into technical default.”

https://www.reuters.com/article/us-argentina-bonds/meters-from-a-precipice-buenos-aires-province-on-edge-as-debt-deadline-looms-idUSKBN1ZU0AV


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Unrest broke out on October 18 initially against a modest hike in metro fares in Santiago [Chile].

“It quickly mushroomed into wider protests against social inequality… But while the frequency and intensity of protests have subsided since October, they have continued regularly nonetheless.”

https://www.france24.com/en/20200130-two-dead-as-new-wave-of-chile-protests-break-out


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Anti-government protests have turned violent in the Guinean capital, Conakry, with two people killed by security forces in as many days. At least 22 people have died since demonstrations began in October.”

Video report:

https://www.aljazeera.com/news/2020/01/guinea-protests-anti-government-demonstrations-continue-200130105621557.html


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Britain brings down the curtain on 47 years of European Union membership on Friday with little in the way of official ceremony to mark the historic moment.

“Some 1,317 days after the 2016 referendum vote to Leave, the formal departure from the 28-nation bloc will take place at 11pm UK time – midnight in Brussels.”

https://www.independent.co.uk/news/uk/politics/brexit-day-leave-eu-today-membership-campaign-boris-johnson-a9310396.html


The French economy shrank unexpectedly for the first time under the presidency of Emmanuel Macron at the end of last year, as the country was disrupted by protests and strikes over pension reform.”

https://www.ft.com/content/f3088ca8-43f9-11ea-abea-0c7a29cd66fe


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“When Lebanon‘s protests erupted in October, thousands found a renewed commitment to their homeland and vowed to fix a country that has long fed its best and brightest to the diaspora. Then the economy unravelled.

Students and young professionals who had mobilised en masse to demand better opportunities in their home country started filling in immigration forms and applying to universities abroad.”

https://www.arabianbusiness.com/politics-economics/438827-new-crisis-looms-for-lebanon-as-citizens-flee-country


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“The continuing loss of young lives and the daily bloodshed [in Iraq protests] is intolerable”, said UN Special Representative Jeanine Hennis-Plasschaert

“…lamenting that “at least 467 protesters have been killed and over 9,000 injured since 1 October”. She warned that that the use of force only costs “precious lives” and will not end the crisis.”

https://news.un.org/en/story/2020/01/1056312


The Hong Kong government has privately warned diplomats it is bracing for a bombing campaign by radical pro-democracy protesters as the territory enters its tenth month of unrest.”

https://www.ft.com/content/5636f828-3e69-11ea-b232-000f4477fbca


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A public health scare on this scale is likely to have immediate economic repercussions for China’s economy in three vital ways:

“…a sharp downturn in the tourism and leisure industry as people cancel or avoid travel and events; a pause in spending, production and borrowing as uncertainty and travel restrictions impact businesses, jobs and consumer confidence; and higher costs related to measures introduced to mitigate the spread of infection…”

https://edition.cnn.com/2020/01/30/perspectives/coronavirus-economic-impact/index.html


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Commodities including crude oil and copper fell Thursday, extending their recent slide on concerns that the worsening coronavirus outbreak would pare Chinese demand for raw materials.”

https://www.wsj.com/articles/commodities-slump-on-fears-chinese-demand-will-drop-11580393760


Tianqi Lithium Corp. $300 million offshore bonds sank the most on record last week amid reports that the giant miner was facing uncertainty over the repayment of just 300 million yuan ($43 million) of debt.

“They’ve since been drifting about 66 cents on the dollar, near an all-time low, amid continued concern about its financial health.”

https://www.bloomberg.com/news/articles/2020-01-31/china-lithium-giant-faces-debt-mountain-after-deal-at-cycle-top


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Fallout [from the coronavirus] for crude-tanker shipping and public equities took center stage on the quarterly conference call of tanker major Euronav (NYSE: EURN). While the comments on the call were about crude tankers, almost all of them could apply to all modes of shipping.

“”This is bad news,” said Euronav CEO Hugo De Stoop. “Let’s not pretend it’s anything but bad news…””

https://finance.yahoo.com/news/coronavirus-crisis-affects-tanker-shipping-215050824.html


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Countries around the world are facing major fallout from the new coronavirus. Cases of the virus originating in Wuhan have cropped up worldwide, forcing governments to roll out measures to screen travelers or even restrict arrivals in hopes of preventing outbreaks in their own countries…

“The effects, of course, are not just limited to public health.”

https://nationalinterest.org/blog/buzz/what-if-coronavirus-and-chinas-quarantines-caused-global-recession-118746


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