“In 1941, Britain considered its colony of Singapore to be pretty much impregnable. But while the naval base was bristling with big guns, its defences were geared towards preventing a sea-based invasion and when the attack came it was on land, down the Malay peninsula. Britain was expecting trouble, just not from that direction.
“The same fate has befallen the International Monetary Fund and the Office for Budget Responsibility, both of which have been forced to rip up their forecasts as a result of Covid-19. Both organisations knew there was potential for things to go wrong: they simply did not spot the likely cause.
“The fact that the Covid-19 pandemic spread so quickly meant countries had virtually no time to prepare. Nor had they any experience of a recession arriving with such sudden ferocity.”
“Flooding financial markets with liquidity, as central banks have done, may prevent problems on the real side of the economy from destabilising financial institutions and markets.
“But doing so will not mend the economy or even halt its downward spiral.”
https://www.afr.com/policy/economy/the-past-may-not-guide-us-through-this-crisis-20200415-p54k0w
“The global economic hit from the coronavirus crisis will likely be four times worse than the financial crisis and the U.S. will see its highest unemployment rate since World War II, according to a Goldman Sachs forecast.”
“US banking mammoth JP Morgan (NYSE:JPM) reported a plunge in profit as it made a near $7 billion provision to cover potential loan defaults given huge disruption caused by Covid-19. Net income or profit fell by 69% to $2.87 billion…
“Wells Fargo simultaneously posted quarterly results. Profits also plunged as bad debt provisions soared.”
https://www.ii.co.uk/analysis-commentary/ii-view-grim-outlook-jp-morgan-profit-plunges-ii511283
“Three top House Democrats have asked the Federal Deposit Insurance Corp. (FDIC) to explain how the agency is preparing for a financial crisis. The lawmakers’ letter to FDIC Chairman Jelena McWilliams, dated April 13, cited an independent report about weaknesses in the Fed’s crisis readiness.”
“The Energy Information Administration sees U.S. oil production from shale formations falling from roughly 8.71 million barrels per day this month to less than 8.53 million in May.
“The latest estimates published Monday show how the price and demand collapse is taking hold as producers scale back operations in the saturated and coronavirus-stricken market.”
https://www.axios.com/us-shale-oil-production-slowdown-779b77d8-cc77-4ef3-b882-d61ea1f8795e.html
“Murray Energy Corp., the nation’s largest private coal producer, said Tuesday it is negotiating to resolve lenders’ allegations that it breached its $450 million chapter 11 financing package.
“Murray has been cut off from its bankruptcy financing after lenders alleged a series of breaches to their credit agreement…”
“The UK has received about 1.4m new benefit claims for welfare payments as the coronavirus lockdown freezes large sections of the economy.
““It’s now up to about 1.4m,” Work and Pensions Secretary Therese Coffey told the BBC, adding that the figure included Universal Credit and job seekers’ allowance or employment support allowance.”
https://www.cityam.com/uk-benefit-claims-surge-to-1-4m-as-coronavirus-economic-crisis-bites/
“Britain’s economy could shrink by 35% this spring and unemployment soar by more than 2 million due to the coronavirus crisis, the government’s independent economics forecaster has warned…
“…joblessness could hit 10% by the end of June and government borrowing this year would increase at the fastest pace since the second world war.”
“…the Crisis in the Danish airline industry continues unabated. Now report also the Danish company Jet Time on the field with a cry for help to the government to avoid a looming bankruptcy. All employees except the lowest paid – are already gone 25% down in wages, including the company’s directors.”
https://www.globaldomainsnews.com/the-danish-airline-risks-bankruptcy-executives-go-down-in-salary
“Almost two in every three hoteliers [in Greece] think they might go bankrupt due to the tourism sector shutdown, while the vast majority of hotel owners expect their annual turnover to decline by more than 50 percent this year.”
https://www.ekathimerini.com/251672/article/ekathimerini/business/hotels-on-brink-of-bankruptcy
“Mexican business leaders begged President Andrés Manuel López Obrador to announce a stimulus package for an already ailing economy about to be battered further by the coronavirus pandemic.
“But López Obrador balked at the idea of bailouts and tax breaks.”
“Turkey is on shaky ground and its currency depreciating as controversial monetary moves and fast-rising coronavirus cases threaten to plunge an already fragile economy into much more danger…
““There will be hard times ahead, because Turkey was already at a macroeconomically vulnerable position before the coronavirus hit.””
“Middle East economies are set to suffer a huge economic hit this year because of the Covid-19 pandemic.
“Their situation is being exacerbated by domestic political turmoil and the collapse in oil prices.”
“Direct cash transfers and income tax relief for citizens and residents are not real options in the GCC: There is not personal income tax to refund, and it is not in the long-term interests of Gulf governments to subsidize salaries of foreign workers…
“The bank sector in the GCC is especially vulnerable because the proportion of loans that local banks extend to the government or to government-related entities has been rising since 2009.”
https://www.al-monitor.com/pulse/originals/2020/04/gcc-economy-covid19-coronavirus-banks-save.html
“An increasing number of countries could default on their debt in the coming 12-18 months as governments globally increase spending to limit the economic damage from the coronavirus pandemic, an economist said on Wednesday.
““I do think we will see some issues there, possibly we could see a euro zone crisis come back with countries like Greece or Italy … likely to be at the center of that,” Simon Baptist, global chief economist at consultancy The Economist Intelligence Unit, told CNBC’s “Capital Connection.”
““Across the emerging world, I’ll pick out countries like South Africa and Brazil as being likely to suffer a further crisis as a result of this,” he added. “And, of course, Argentina has effectively gone back into sovereign default already.””
https://www.cnbc.com/2020/04/15/coronavirus-more-countries-could-default-on-debt-economist-says.html
“Commercial creditors owed money by poor countries should only be eligible for government Covid-19 bailout cash if they agree to sign up to a comprehensive global debt deal, the head of one of the world’s leading charities has said.”
“As trade walls go up and governments panic about preserving their own food sources, the coronavirus threatens to disrupt global supply chains.
“Russia, the world’s largest wheat exporter, is limiting grain exports from April to June. Egypt, the world’s biggest wheat importer, has ramped up grain purchases and stopped exports of legumes.”
https://foreignpolicy.com/2020/04/14/how-to-stop-food-crisis-coronavirus-economy-trade/
““The story the data tells is that companies are faced with a lengthy recovery to normal [supply chain] operations in the wake of the virus outbreak,” said Thomas W. Derry, CEO of ISM.
““For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.””
“[This is] much the biggest crisis the world has confronted since the second world war and the biggest economic disaster since the Depression of the 1930s.
“The world has come into this moment with divisions among its great powers and incompetence at the highest levels of government of terrifying proportions. We will pass through this, but into what?”
https://www.ft.com/content/d5f05b5c-7db8-11ea-8fdb-7ec06edeef84
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