The financial system is very unwell, in fact terminally so – riddled with imbalances and distortions. As we push it to the limits of its elasticity in our attempts to maintain growth, it no longer sends clear signals about what anything is actually worth:
“Currency analysts are lamenting an avalanche of cheap money from the US Federal Reserve, which they say has created bizarre conditions in which exchange rates track stocks rather than economic fundamentals.
“For decades, strategists have analysed exchange rates on the basis of the outlook for growth and interest rates in the countries concerned. Generally, the better the prospects, the better the currency can be expected to perform.
“But that relationship has broken down since March’s market rout, analysts say. As the global economy moves towards one of its worst recessions in history, currencies that are usually most sensitive to growth have become the best performers against the US dollar.”
https://www.ft.com/content/9cdee0fa-a4a1-44d4-a091-21ceeb6fcea1
“Life used to be so easy for central banks. A tweak here and a tweak there was all it took to keep inflation under control.
“Now they are creating money in unprecedented amounts and contemplating negative interest with only the sketchiest idea of how things will pan out. It is much more complex and much more dangerous, not least for central banks themselves.”
“In a new report, economists writing for the Brookings Institution estimate that the United States could see “on the order of 300,000 to 500,000 fewer births next year” as a result of the economic recession triggered by the novel coronavirus.
“The economists, Melissa S. Kearney and Phillip Levine, derive their estimates from data on birthrates during the Great Recession and the 1918 flu pandemic.”
“The Bank of England is expected to build back its war-chest for fighting the coronavirus crisis on Thursday by announcing an increase of at least 100 billion pounds in its bond-buying programme.
“The British central bank has already spent most of the 200 billion pounds of fresh firepower it gave itself in March as it soaks up much of the government’s COVID-19 borrowing.”
“Scotland’s GDP plunged by 18.9% during April – the first full month of lockdown – adding to fears that it would have the worst performing economy in the developed world.
“Senior SNP figure Andrew Wilson, who chaired his party’s Growth Commission, issued the warning as the data laid out the challenge facing the government.”
https://dailybusinessgroup.co.uk/2020/06/lockdown-sees-april-gdp-slump-by-almost-a-fifth/
“The Deputy Governor of the Central Bank [of Ireland] has said while the financial system is stronger than a decade ago, its resilience is not limitless.
“Sharon Donnery made her comment as she addressed an online presentation hosted by the Institute of International and European Affairs.”
https://www.rte.ie/news/business/2020/0617/1148013-central-bank-warns-resilience-is-not-limitless/
“A campaign has been launched to raise awareness of food security and to encourage [Irish] people to grow their own produce.
“Those behind the BiaHero initiative say the Covid-19 crisis has exposed the vulnerability of the global food system. Only 1% of Irish farms grow fruit and vegetables so large quantities are imported.”
“Australia lost a further 227,000 jobs between April and May, resulting in a total loss of 835,000 jobs in seasonally adjusted terms since March and a 0.7% jump in unemployment to 7.1%…
“The figures intensified the political debate about how to handle the expiry of jobkeeper in September…”
“New Zealand entered recession for the first time in almost a decade as the coronavirus pandemic led to the nation’s biggest quarterly contraction in 29 years…
“New Zealand is bracing for a severe contraction in the three months through June after it responded to the pandemic by closing its border and imposing a strict nationwide lockdown that stayed in place until mid-May.”
“The World Bank forecasts that Brazil’s economy will shrink 8 per cent this year as the broad shutdown weighs on businesses and consumers alike….
“Such a slump in Brazil’s gross domestic product would lead to a wave of corporate bankruptcies, soaring government debt and surging unemployment in a nation with abject public finances.”
https://www.ft.com/content/8f47d0b7-54e6-42f2-aa74-4a100508c849
“Chile’s Central Bank revised its GDP projections for the year on Wednesday, predicting a fall of 5.5 to 7.5 percent due to the effects of the coronavirus pandemic.
“It would be the largest contraction in 35 years and comes three months after the bank projected a fall of just 1.5 to 2.5 percent.”
“Argentina’s debt restructuring talks, in a tense final stretch, hit a roadblock on Wednesday with the government determined not to cede further ground…
“…after making an improved offer and a key creditor group warning that negotiations had failed.”
“South African tourist towns flounder as safari tourism collapses. Poaching set to increase as rural South African communities reliant on Safari tourism face starvation while the tourism industry in Africa’s most developed economy grinds to a halt.”
Video:
https://www.dw.com/en/south-african-tourist-towns-flounder-as-safari-tourism-collapses/av-53849476
“…today, half of Zimbabwe’s population is struggling to feed itself, high inflation rates – which helped destroy the economy over a decade ago – have returned.
“Zanu-PF has stopped telling the world that Zimbabwe is “open for business”
“…and has reverted to its old habit of accusing unnamed Western nations of fomenting unrest and of conspiring with local critics to undermine the government and the economy.”
https://www.bbc.co.uk/news/world-africa-53062503
“Hundreds of thousands of pigs have been culled by Nigerian farmers in response to an explosion of African swine fever… the recent wave of infections is the worst by far.
““We have never experienced anything of this scale in the past. This is the worst and largest outbreak ever,” says Ayo Omirin, a pig farmer at Oke-Aro, who has lost more than 600 of his 800 pigs.”
“Atiku Abubakar, has again, warned that Nigeria is in dire financial crisis under the Buhari administration.
“The former vice president warned that Nigeria risks a situation where its revenue cannot sustain debt servicing obligations – The Buhari’s government spends a lion’s share of Nigeria’s national income servicing debts.”
https://www.legit.ng/1339479-nigeria-president-buhari-financial-crisis-atiku.html
“Lockdowns, border closures and the global fall in commodity and oil prices are all wreaking havoc on fragile sub-Saharan African economies.
“This has been exacerbated by the continent’s substantial debt burden… The continent has no greater creditor than China.”
“The United States has imposed some of the toughest sanctions yet against the regime of Syrian president Bashar al-Assad…
“It comes at a tricky time for Mr Assad as the country staggers through an unprecedented financial crisis that has sparked rare anti-government protest in regime-held areas.”
“Following the demand and oil price crashes, Saudi Arabia has idled offshore rigs and postponed the start of a US$18-billion expansion project…
“Saudi Aramco is also suspending the project for expansion of the offshore Marjan and Berri oilfields for a period of between six and twelve months.”
“Russian President Vladimir Putin has been struggling. The pandemic did not give him a boost, and in fact just solidified the downward trend his approval rating has been suffering over the past two years.
“Austerity measures, such as a particularly unpopular pension reform, have caused anger in the general public, even among his supporters. The collapse of oil prices and a looming economic crisis – a second for Russia in the past 10 years – have also severely affected public opinion.”
https://www.aljazeera.com/indepth/opinion/putin-facing-growing-anger-russia-200616190716489.html
“Hertz, which declared bankruptcy under Chapter 11 last month, disclosed its decision to freeze the offering on Wednesday in a regulatory filing. Earlier in the day, SEC Chairman Jay Clayton said on CNBC that the agency had informed Hertz that regulators had “comments” about its proposed stock offering.
“Clayton also said he expected Hertz to put the transaction — which is highly unusual for a company that has filed for bankruptcy protection — on hold until the SEC’s comments had been addressed.”
https://www.cbsnews.com/news/hertz-suspends-stock-offering-price-bankrupcy/
“Asian stocks and Wall Street futures fell on Thursday as spiking coronavirus cases in some U.S. states and in China dented hopes of a quick global economic comeback from the pandemic.”
“Volatile markets and the economic fallout from the virus could wipe out as much as $16 trillion of global wealth this year and hinder growth for the next five years, according to a study by Boston Consulting Group.
“By comparison, the 2008 financial crisis erased $10 trillion.”
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