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One of the scariest things for people, even people who are managing, who are making payments, is that their budget is balanced on a knife edge,” says Lara Briehl, a debt counsellor in Washington state. “If they lose any source of income, the whole thing falls down.”

“Ms Briehl has worked for American Financial Solutions, a non-profit organisation, for three years. With the coronavirus outbreak paralysing the US economy and leaving millions out of work, her conversations with clients have taken on new urgency. Many of the people she speaks to work in the gig economy, with little access to unemployment benefits, or come from service industries. A lot are facing debt worries for the first time.

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“Before the virus, Ms Briehl says, she referred clients to social welfare services — unemployment, food, and housing benefits — in perhaps 40 per cent of cases. Now she does so in more than two-thirds.

“This is what happens when at least 20m jobs disappear overnight in a country where total household debt had already reached $14.3tn, according to the US Federal Reserve, before the crisis hit.

“Payment holidays from lenders and unprecedented government support have kept debt delinquency from spiking… But a debt crisis may have been delayed rather than averted, experts say.”

https://www.ft.com/content/a2f10c62-85a5-4f85-bbf2-9ceaa089a92e


U.S. home sales dropped to their lowest level in more than 9-1/2 years in May, strengthening expectations for a sharp contraction in housing market activity in the second quarter following disruptions caused by the COVID-19 pandemic.”

https://uk.reuters.com/article/us-usa-economy/us-home-sales-tumble-to-9-1-2-year-low-price-growth-slows-idUKKBN23T222


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Britain came close to effective insolvency at the onset of the coronavirus crisis as financial markets plunged into turmoil, the governor of the Bank of England has said

“Asked in an interview with Sky News what would have happened had the Bank not intervened, Bailey said: “I think the prospects would have been very bad. It would have been very serious.””

https://www.theguardian.com/world/2020/jun/22/britain-nearly-went-bust-in-march-says-bank-of-england


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British industrial output recorded its biggest quarterly fall on record during the three months to June as COVID-19 heavily disrupted operations, and a further decline is likely in the months to come, a survey showed on Monday…

“The CBI said the steepest falls in production came in the automotive, mechanical engineering and metals sectors.”

https://uk.reuters.com/article/us-health-coronavirus-britain-industry/uk-factories-suffer-worst-quarter-on-record-cbi-says-idUKKBN23T1BO


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Britain left the EU on 31 January, but talks on future relations have so far made little progress.

“The UK wants a trade deal with no tariffs or quotas and few strings, while the EU wants a closer alliance that would also cover security, climate and transport, and strongly aligned regulations.”

https://www.cityam.com/german-banks-press-eu-for-action-on-brexit-equivalence/


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The biggest weapon in the arsenal Europe assembled to counter the coronavirus economic collapse has yet to find the target.

“Less than 15% of funds made available by governments via banks as loan guarantees for business has been used.. The programs’ teething pains risk slowing the recovery from the deepest recession in memory, especially in Italy and the U.K.”

https://www.msn.com/en-us/money/markets/europe-leaves-dollar2-trillion-on-the-table-in-virus-recession-fight/ar-BB15QZJX


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“…while the Fed has been able to ease concerns around corporate bonds at an aggregate level, even the most powerful central bank in the world cannot defy the financial laws of gravity governing defaults. What CDS traders euphemistically call “credit events” — when a company fails to make a payment on its debt, triggering a payout on the swaps — are happening with alarming regularity…

“…credit events will be coming to Europe sooner rather than later… Dutch retailer Hema’s swaps are widely expected to be triggered in coming weeks because of a debt restructuring. Hema could yet be overtaken by Wirecard…”

https://www.ft.com/content/8f3da52d-63db-49ec-88a7-e70470d39829


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In what could be one of the biggest financial frauds of recent years, shooting star German payments provider Wirecard has admitted €1.9 billion that auditors say are missing from its accounts likely “do not exist.”

“…the firm entered Germany’s prestigious DAX 30 index with great fanfare in 2018 after elbowing out traditional lender Commerzbank. Now Wirecard’s name is more frequently heard in association with Enron.”

https://www.arabnews.com/node/1693981/business-economy


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The accounting scandal engulfing controversial German payments provider Wirecard AG could have wide-ranging impacts on Australian banks, merchants and retail customers.

“Australian consumers are at risk of losing access to redemptions on prepaid cards issued by the German company. Westpac, Cuscal and Bendigo Bank could suffer fallout from Wirecard’s troubles, along with thousands of merchants, including travel operator, STA Travel.”

https://www.bankingday.com/cuscal-bendigo-wirecard


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Coronavirus cases may be dropping off but the economic impacts of the virus in Australia are only just beginning, with concerns mental health cases are yet to spike among young people

“Director of youth mental health service Orygen and University of Melbourne professor Patrick McGorry said young people would be among the most vulnerable during a recession.”

https://www.sbs.com.au/news/with-australia-in-recession-there-are-grave-fears-for-the-mental-health-of-young-people


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Thailand is searching for a new central bank governor to steer the economy through one of its biggest crises in decades as traditional policy options run out.

“Governor Veerathai Santiprabhob, 50, will leave the bank once he finishes his five-year term at the end of September, declining to stay on longer because of family reasons.”

https://www.bangkokpost.com/business/1939560/next-central-bank-governor-faces-crisis-with-near-zero-rate


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China’s economy contracted in the three months to June from a year earlier, signaling the start of a recession… Sluggish global demand remained a key drag on growth

““The eventual return to growth does not mean a return to anything approaching the old levels of growth,” CBB International said in its quarterly report on China’s economy. “Until and unless global demand recovers more forcefully, the incremental quarterly improvement just seen will make for a contraction for full-year 2020.””

https://economictimes.indiatimes.com/news/international/business/china-in-recession-and-heading-for-full-year-decline-beige-book/articleshow/76523344.cms


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Asian refiners may have hit a brick wall in their recovery from the virus-driven slump with the rebound in fuel demand not big enough to clear a massive glut built up over the last few months.

“Processors are unlikely to increase operating rates much further until the surplus is cleared and margins improve, with an Indian refinery executive predicting profits from turning crude into fuels such as gasoline will remain weak for another six months.”

https://business.financialpost.com/pmn/business-pmn/asia-refiners-face-battle-with-fuel-glut-dwarfing-demand-rebound


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The coronavirus is spreading in Pakistan at one of the fastest rates in the world, and its overwhelmed hospitals are turning away patients.

But the government is pushing ahead with opening up the country, trying to salvage a near-collapsed economy where millions have already slid into poverty from pandemic restrictions.”

https://www.voanews.com/south-central-asia/virus-cases-soar-pakistan-says-it-must-keep-economy-open


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In the first four months of 2020, murders in Lebanon doubled from the same period last year. Car thefts jumped nearly 50% and burglaries 20%, according to a report by the Beirut-based research firm Information International, based on police data.

“As the currency plunges, more unrest is feared in a country with a tumultuous history and where sectarian tensions are never far from the surface.”

https://www.businesslive.co.za/bd/world/2020-06-22-lebanese-fear-the-worst-amid-financial-crisis/


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Global textile orders are down by more than 40% on last year as a result of the coronavirus pandemic, new data shows, with the knitting sector experiencing the worst hit.

“According to a survey of 600 members of the International Textile Manufacturers Federation between 20 May and 8 June, on a global scale, current orders are down by 42% on average, on a global scale.”

https://www.just-style.com/news/global-textile-orders-slump-by-40-amid-covid-19_id139006.aspx


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The global economy’s fragile recovery is facing a fresh hurdle as a surge in coronavirus cases threatens to keep businesses closed and consumers on edge

“”The fight is nowhere close to being over,” said Tuuli McCully, the Singapore-based head of Asia Pacific economics at Scotiabank.

“”A second significant wave of infections in advanced economies is a huge risk for the global economy that is still in very early stages of recovery.””

https://www.japantimes.co.jp/news/2020/06/22/business/economy-business/surge-coronavirus-cases-jolts-prospects-world-economy/#.XvG8rGhKjIU


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According to analysts at Goldman Sachs, at the end of April, just five companies — Microsoft, Apple, Amazon, Alphabet and Facebook — were up around 10 percent, but the rest of the S&P 500 stock index was down 13 percent.

“The outperformance of these companies has masked the real pain in the market, and eventually the macro-headwinds will catch up to them too.”

https://www.forbes.com/sites/stephenchen/2020/06/23/are-we-in-the-mother-of-all-bubbles/#3d8c0fc75464


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“The events leading to the Great Recession that started in 2007 are often referred to as a credit crisis. But that is true only in a narrow way. The recession was driven primarily by the bursting of a housing bubble and the related impacts on the financial system.

The real credit crisis of our lifetime is turning out to be the coronavirus recession.”

https://www.weforum.org/agenda/2020/06/forget-2009-this-real-credit-crisis-our-time/


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“…an imminent banking crisis is now a near certainty, with most global systemically important banks in a weaker position than at the time of the Lehman crisis. US markets appear oblivious to this risk..

It has been generally forgotten that the global economy was already facing a recession before the virus lockdowns.”

https://seekingalpha.com/article/4354917-crisis-goes-up-gear


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