Are we headed for another Great Depression? Various economists and analysts give their views:
“The Depression caused more than economic pain. It metastasised to a loss of faith in democracies, the triumph of ideologies of hate, a turn to demagogues, a breakdown of international trade and finance and, ultimately, the second world war…
“Environmental and energy challenges loom.”
“…a new wave of debt defaults could make it the 1930s all over again.”
https://www.ft.com/content/f544bda2-a3fd-11ea-81ac-4854aed294e5
“The collapse in demand for new vehicles from U.S. rental car fleets hit automakers hard in May…
“Automakers could lose up to 12% of their annual U.S. vehicle sales in 2020 as car rental companies slammed by the coronavirus pandemic slash fleets and restructure…”
“Even as the federal government has paid out unemployment cash at an unprecedented level over the last three months, an estimated one-third of those laid off due to the pandemic’s economic meltdown have not gotten checks…
“For millions of Americans, the unemployment checks have not been in the mail. Or anywhere else.”
https://www.pymnts.com/economy/2020/many-jobless-still-waiting-for-unemployment-checks/
“The pandemic has sent child hunger soaring to unprecedented rates.
“The national rate of food insecurity tripled between March and April; a May study from the Brookings Institution revealed that one-fifth of mothers were struggling to feed their kids—the highest rate since such data became available in 2001.”
https://www.thenation.com/article/society/rural-childhood-hunger/
“Not only is the nation facing current crises of public health, the economy, race relations and public safety, and perhaps democracy itself, but there are still things that could happen, he notes, such as a foreign conflict or cyberattack.
“”The most disturbing thing is that we’re only five months in,” Drezner adds. “There’s seven months to go.””
“Poverty campaigners have called for an emergency cash support scheme to help struggling low-income households after UK food bank charities reported that the first full month of coronavirus lockdown was their “busiest ever”…
“The charities said… current social security safety net measures were not enough to prevent poorer families being swept into destitution.”
“Millions of UK households that have taken payment holidays on their mortgage or other debt during the pandemic are likely to receive “thuggish” debt threat letters in coming weeks as lenders are legally required to issue the warnings.”
“The UK’s fishing industry has accused the EU of using a “nuclear option” to secure a Brexit deal, warning that it is prepared for blockades by the French if trade talks collapse.
“Fishing leaders have also revealed they do not support an extension to the transition period despite being hit badly by the coronavirus pandemic, with the closure of restaurants and hotels affecting sales.”
“The French government has cut its annual GDP forecast to -11% from -8% this year, in anticipation of a deeper recession than expected triggered by the coronavirus pandemic.
“”The economic shock is brutal,” Finance Minister Bruno Le Maire said in a tweet translated from French.”
“Some 20,000 protesters last night rallied in Paris to demonstrate against the 2016 death of a young black man in French police custody, mirroring the slogans and symbols used in the George Floyd riots in the US.
“The protest rapidly descended into rioting, with bonfires lit in the street outside the Tribunal de Paris courthouse before police officers fired tear gas and rubber bullets at the barricaded demonstrators.”
“The European Central Bank scooped up all of Italy’s new debt in April and May but merely managed to keep borrowing costs for the indebted, virus-stricken country from rising, data showed on Tuesday.
“The data also showed the ECB effectively ditched its rulebook in response to the coronavirus pandemic, hoovering up much more Italian debt than the country’s quota would dictate while under-buying Germany.”
https://uk.finance.yahoo.com/news/ecb-scoops-italys-debt-just-141335562.html
“Australia has entered its first recession for 29 years after the economy went backwards by 0.3% in the March quarter, with the impact of bushfires and the coronavirus ending the nation’s extraordinary, uninterrupted run of economic growth.
“The treasurer, Josh Frydenberg, told reporters a recession was inevitable…”
“Japanese financial institutions hold nearly 20% of the world’s collateralised loan obligations (CLO), potentially exposing them to big losses if the coronavirus pandemic erodes the creditworthiness of debt, a survey showed on Tuesday.
“CLOs are securities backed by a pool of loans taken out by firms with high levels of debt and typically a non-investment grade credit rating.”
https://uk.finance.yahoo.com/news/japanese-banks-own-20-collateralised-101707062.html
“South Korea unveiled on Wednesday a 35.3 trln won ($28.8 billion) supplementary budget, to raise the total stimulus to 270 trillion won for an economy facing its worst growth since the 1998 Asian financial crisis due to the coronavirus pandemic.
““We’re facing an economic crisis now, we had no choice but to do more on the fiscal front as fiscal policies are the last bulwark (of government policies),” Hong told journalists in a news briefing days prior announcing the additional budget.”
“China’s success in luring foreigners into its domestic debt market, the world’s second largest, faces a new test in coming months as officials try to drum up interest in a record wave of bonds from local authorities.”
““We are so frustrated. It is very sad. You feel lost, and you don’t know what to do. I feel [in Hong Kong] we are finally entering a police state,” said Tsang, who is in her mid-40s and was at the 2003 protests.
““It is much worse. This year is 10 times what we felt in 2003. It is very brutal.””
“Capital flows to emerging markets securities fell 78 per cent in May despite efforts to reopen economies in Asia and North America that have been hit by Covid-19, the Institute of International Finance said…
“The IIF said that the pandemic’s cascading nature in the subsequent months left some emerging markets depressed.”
“The Covid-19 outbreak and the ensuring lockdown has hurt almost all industries in India, but for the country’s $370 billion shadow banking sector, this might be the last nail in the coffin.”
Timeline:
https://qz.com/india/1860466/how-indias-nbfc-crisis-deepened-from-ilfs-defaults-to-covid-19/
“Turkish policy makers are pumping money into the economy at the fastest pace in over a decade to contain the fallout of the coronavirus pandemic, a move that risks weakening the currency and stoking inflation…
“After nine straight interest-rate decreases, the lira already has one of the lowest yields in the world when adjusted for inflation.”
https://ca.finance.yahoo.com/news/turkey-surging-money-supply-revives-210001645.html
“The world’s low-income and emerging market economies will likely remain deeply damaged even five years after the coronavirus pandemic and associated lockdowns began, according to a new study from the World Bank.
“The virus has already plunged the world into a severe recession, the World Bank said, and its research casts doubt on scenarios in which emerging markets bounce back quickly after the health crisis has eased.”
“Like millions of Guatemalans, Leidy is out of work due to coronavirus lockdown restrictions and she is struggling to feed her family.
“The white flags, appearing in droves hung from residences or waved from roadsides across Guatemala, signify a surrender to hunger.”
“The health system in Yemen is in a state of collapse after five years of war, disease and starvation, and now coronavirus, the United Nations has said.
“A fund-raising conference yesterday was told that the country was billions of dollars short of the regular annual funding intended to ease its long-running humanitarian crisis, even before the virus began to affect the country.”
“United Nations, Jun 3 (AP) The president of the UN Economic and Social Council is calling for urgent action to help the growing number of countries already facing or at risk of “debt distress”…
“…because of the economic impact of the COVID-19 pandemic…
“Juul said that means even if the moratorium is extended to 2021, “many countries will have to make difficult choices between servicing their debt, fighting the pandemic, and investing in recovery.””
https://www.theweek.in/wire-updates/business/2020/06/03/fgn6-virus-un-debt.html
“The world’s poorest – who have lost their incomes from illness or because of lockdowns – are disproportionately impacted by the coronavirus pandemic and, unless they receive enough support, hunger levels will soar and some countries may see rising violence, experts say.”
Read the previous ‘Economic’ thread here and visit my Patreon page here.
