“In stark contrast to some of the exuberance on display in global stock markets recently, the OECD pulled no punches today in its assessment of the effect of coronavirus on the world economy.
““By the end of 2021, the loss of income will exceed that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments,” noted the organisation’s chief economist.
“The OECD’s best-case scenario — where there is no substantial second wave of the virus — involves a global contraction of 6 per cent this year…”
[For comparison, the worst annual contraction of the Global Financial Crisis was just 0.1% in 2009. The global economy needs to be growing at 2.5% or more to be healthy and anything less than that is considered a recession by the IMF. A 6% contraction, underestimate thought that may prove, is mind boggling].
https://www.ft.com/content/94a640cf-44a5-483a-b29f-dc0320f5f167
“The US economy will shrink by 6.5% this year, the Federal Reserve has forecast, announcing it would keep interest rates close to zero into 2022…
“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” it said in a statement.”
https://www.theguardian.com/business/2020/jun/10/us-economy-federal-reserve-jobs-coronavirus
“The US economy right now is like a jumbo jet that’s in a steady glide after both its engines flamed out. In about six weeks, it will likely crash into the side of a mountain.
“What’s kept us in the air so far is an extraordinary government relief effort.”
https://www.buzzfeednews.com/article/tomgara/economy-recession-coronavirus
“Delta is in danger of defaulting on some of its debt — not because it doesn’t have enough cash, but because it expects it cannot comply with the current terms of its borrowing.
“The airline said in a filing Wednesday that it negotiating with lenders to change those terms. But it cautioned that “based on the reduction in demand that we have experienced and are continuing to experience as a result of the Covid-19 pandemic, we expect that we will not be able to satisfy,” some of those existing terms by early next year.”
https://edition.cnn.com/2020/06/10/business/delta-possible-debt-default/index.html
“Up to 124,000 jobs in the UK’s aviation industry and its supply chains are at risk of disappearing in just three months because of the coronavirus, according to new research.”
“For more than a million UK employers that have used the job retention scheme, the [October] deadline means the clock is now ticking…
“The Treasury has damped speculation that it was planning a big summer stimulus package of tax cuts or large spending measures to boost demand.”
https://www.ft.com/content/8de9ccb0-b315-4cae-9967-31ae9f9e3dff
“Britain’s economy is likely to suffer the worst damage from the Covid-19 crisis of any country in the developed world, according to a report by the Organisation for Economic Cooperation and Development.
“A slump in the UK’s national income of 11.5% during 2020 will outstrip the falls in France, Italy, Spain, Germany and the US, the Paris-based thinktank said.”
“The European parliament could veto any trade deal between the UK and the European Union that lacks “robust” safeguards to ensure fair competition and strong standards on the environment and workers’ rights, according to a leaked document…
“The parliament’s text underlines the narrow room for manoeuvre available to the EU chief negotiator, Michel Barnier.”
“Deutsche Bank AG will set aside the most money in more than a decade to cover the cost of loans souring as Germany’s largest lender grapples with the economic collapse in the wake of the coronavirus pandemic…
“…analysts expect the bank to post its sixth straight losing year in 2020.”
https://uk.finance.yahoo.com/news/deutsche-bank-sees-surging-loan-071753298.html
“Business sentiment among large companies in Japan in the April-June quarter hit the lowest level in 11 years amid fallout from the coronavirus pandemic, a government survey showed Thursday…
“The index was the lowest since the first quarter of 2009…”
https://www.japantimes.co.jp/news/2020/06/11/business/business-sentiment-coronavirus/#.XuHep0VKjIU
“As multiple crises are simultaneously bearing down on Lebanon, its fragile humanitarian situation is nearing a breaking point. Lebanon hosts the highest proportion of refugees per capita in the world, including over 1.5 million Syrian refugees and 174,000 Palestinian refugees, and has struggled to cope with the spillover effects of the nine-year conflict in Syria.
“On top of this, Lebanon now faces its worst ever economic and financial crisis…”
“Anti-government demonstrations and counter protests continued in the southwestern Syrian city of Sweida on Wednesday, as an economic crisis exacerbated by sanctions and a collapsing currency provokes unrest for a fourth day…
“The pro-government rally comes as anti-government protests continued to rock the majority-Druze city.”
https://www.middleeasteye.net/news/syria-sweida-protests-government-fourth-day
“A cross-section of Wall Street has warned that there’s too much irrational exuberance in the markets, and the oil price rally is not fully supported by fundamentals…
“According to Warren Patterson, head of commodities strategy at ING, as well as analysts at Goldman Sachs, refining margins, aka crack spreads, across different regions around the globe are still way off their norms, portending continuing weak global demand for distillates.”
“The coronavirus pandemic is splintering the world economy, and policy makers can’t risk a premature withdrawal of lifelines to businesses and the most vulnerable people, the OECD warned…
“In the U.S., some Republicans are already questioning the need for more stimulus after a surprise jump in payrolls in May.”
“This huge rise in financial leverage will prove advisable and sustainable if, and only if, economic growth picks up quickly and validates it…
“But if growth disappoints, the economy and markets will have to cope with a massive debt overhang that results in even greater central bank distortions of markets and lower growth potential. There will be widespread debt restructurings too, and disorderly non-payments.”
https://www.ft.com/content/944c98f3-21aa-40dd-8b5e-a246e9fc444b
“Could it be that stock prices are going up, not because companies are going to do well but because money is going to nosedive in value? The market is NOT actually going up in value, the market is preempting the value of money plummeting…
“In this crazy new world it is important to be able to move between the poles of possibility fast and at low cost because be it inflation or deflation one thing is for sure, its going to be a volatile future… you don’t have to be a genius to recognize there is chaos ahead.”
“You may think that [a banking] crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so.
“As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse.”
https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/
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