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Anyone who believes that we are now well on the road to a global V-shaped economic recovery has not read the International Monetary Fund’s (IMF) recent gloomy World Economic Outlook.

More tellingly, they clearly have not considered how very likely it is that, if the IMF’s depressing world economic outlook is realized, we will have a series of major debt crises in systemically important countries such as Italy and Brazil.”

https://thehill.com/opinion/finance/504842-the-tale-of-a-global-debt-crisis-foretold


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It’s tempting to take the recent rebound in business confidence and activity measures as a sign that the global economy is well on track to make up for its coronavirus-induced losses — except it’s misleading evidence.

Here are some of the charts that appeared on Bloomberg this week, offering insight into the real state of the global economy…”

https://www.bloombergquint.com/global-economics/charting-the-global-economy-that-s-not-a-v-shaped-recovery


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V-shape mania appears to be tapering off. Years from now, market historians will come to regard the spectacular rally since late March as a case study in mass psychosis.

“The explosive resurgence of bulls is not only unsupported by economic reality, it flouts common sense in ways that only extraordinary popular delusions can.”

https://www.fxstreet.com/analysis/why-inflation-doesnt-have-a-prayer-202006290141


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The chances of the US economy slipping into deflation are rising even though the Federal Reserve (Fed) is injecting an unprecedented amount of liquidity into the system to buttress growth and inflation.

“The Fed’s deflation probability indicator, as calculated by the St. Louis Fed, rose to 76.3% last week, the highest level since 2008.”

https://www.fxstreet.com/news/feds-deflation-probability-indicator-rises-to-highest-since-2008-202006290229


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This week’s bank stress tests laid bare the limitations of the current regulatory regime.

“The tests’ original worst-case scenarios — devised in February, before the coronavirus crisis took hold — included shocks such as a 10% unemployment rate that seem laughably optimistic today.”

https://www.bloomberg.com/amp/opinion/articles/2020-06-26/the-fed-just-bungled-its-bank-stress-tests


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Many out-of-work Americans counting on receiving an extra $600 a week through the end of July may be surprised to discover that benefit will disappear nearly a week earlier than they expected.”

https://eu.usatoday.com/story/money/2020/06/24/unemployment-americans-will-lose-their-extra-600-days-earlier-than-expected/3253111001/


Banks have pulled back from a popular credit card promotion on concerns that [US] borrowers struggling during the coronavirus crisis may leave them with defaulting loans.”

https://www.cnbc.com/2020/06/27/credit-card-industry-reins-in-balance-transfer-offers-as-banks-from-jpmorgan-to-amex-fear-defaults.html


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With rampant unemployment and several meat-packing plants linked to COVID-19 outbreaks, experts warn up to 54 million Americans could experience food insecurity in 2020.

“Many are turning to at-home horticulture for relief while questions swirl around the nation’s food supply.”

https://whyy.org/segments/can-coronavirus-victory-gardens-quell-post-pandemic-hunger/


Euro-area inflation could dip below zero in coming months, European Central Bank Executive Board member Isabel Schnabel said on Saturday as she rolled out a vehement defense of the institution’s monetary stimulus.”

https://www.bloomberg.com/amp/news/articles/2020-06-27/ecb-s-schnabel-warns-euro-area-inflation-could-dip-below-zero


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It would be wrong to see in the current [cash hoarding] figures in Europe a sign of economic strength,” ING economist Peter Vanden Houte wrote in a report.

““On the contrary, because of the Covid-19 pandemic, firms have drawn on their committed credit lines to avoid any liquidity shortages in the coming months.”

https://www.bloomberg.com/amp/news/articles/2020-06-26/europe-cash-demand-means-crisis-hoarding-not-economic-recovery


Uncertainty about the scale of potential financial losses caused by coronavirus has accelerated a retreat from the European banking sector by global equity fund managers who have cut allocations to these lenders to the lowest level for at least a decade…”

https://www.ft.com/content/07956dc1-c49f-4ff5-90e7-a141ae35f11a


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About eight million people [UK] have sought help with their debts during the coronavirus crisis, research by Virgin Money has found.

The figures will raise fears of a growing debt bubble…”

https://www.thisismoney.co.uk/money/news/article-8466501/UK-debt-bubble-fears-rise-8m-seek-help.html


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The UK’s Chancellor of the Exchequer Rishi Sunak has warned that there are “tragic projections” for unemployment in the months ahead in a dire reflection on the impact of the coronavirus pandemic on the UK economy.”

https://ukinvestormagazine.co.uk/sunak-warns-tragic-projections-for-unemployment/


As the recession that will surely explode by the autumn takes shape, [UK] food-bank providers report surges in demand of, in some places, around 300%.”

https://www.theguardian.com/commentisfree/2020/jun/28/pandemic-britain-hunger-boris-johnson


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The coronavirus crisis has led the Office for National Statistics to understate the speed prices are rising, according to a growing body of research during the pandemic

The Institute for Fiscal Studies has also found that the inflation rate in food experienced by households was higher in the first month of lockdown than usually experienced in a year.”

https://www.ft.com/content/f6b5ce2f-366f-4845-ac94-bb5448159d58


Hardline policing may provoke civil unrest, UK government warned… “Real sense of calamity on the way, says police commissioner, as lockdown eases and tensions rise.”

https://www.theguardian.com/world/2020/jun/26/hardline-policing-may-provoke-civil-unrest-post-lockdown-government-warned


Hundreds of thousands of UK customers may not be able to access their money on payday or use their cards due to a financial regulator shutting down the British arm of German company Wirecard.”

https://www.dailymail.co.uk/news/article-8465587/Customers-cut-cash-watchdog-freezes-British-arm-collapsed-German-firm-Wirecard.html


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It’s been a spectacularly bad week for German business… The collapse of digital payments wunderkind Wirecard into insolvency is the biggest scandal of them all. It was triggered by a $2 billion accounting fraud that financial watchdogs, the company’s supervisory board and its longtime auditor failed to detect.

Now the regulators and corporate bosses tasked with safeguarding Europe’s biggest and most successful economy are coming under intense scrutiny.”

https://ktvz.com/lifestyle/technology/2020/06/27/wirecards-collapse-reveals-cracks-at-the-heart-of-germany-inc/


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Residents have clashed in a coastal town near Naples after five large blocks of flats were put under a strict 15-day lockdown.

“More than 40 people living there had tested positive for Covid-19. The Italian army was deployed to the area in the small town of Mondragone after some people broke the lockdown to go to work.”

https://www.theguardian.com/world/video/2020/jun/26/clashes-near-naples-as-cluster-of-covid-19-cases-puts-five-buildings-in-lockdown-video


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An elderly man in the town of Volos, Central Greece, was rushed to hospital on Thursday evening after collapsing from starvation in his home. “This is the second such incident this week, after the collapse of a 9-year-old girl in Rhodes…

The two recent incidents are a grim reminder of the destitution many Greeks suffered during the eight-year long economic crisis.”

https://greece.greekreporter.com/2020/06/27/greek-pensioner-collapses-from-starvation-is-hunger-returning-to-greece/


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A disconnect is growing in emerging markets, which have rarely faced such dire economic conditions and yet whose assets are about to round out their best quarter in a decade

“The yawning divide between market gains and economic gloom risks a snapback in the months ahead that would add to recovery headwinds.”

https://uk.finance.yahoo.com/news/reckoning-looms-emerging-markets-economic-210000269.html


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Argentina will extend and tighten a lockdown in and around Buenos Aires following a sharp rise in cases of the novel coronavirus in recent weeks, President Alberto Fernandez said on Friday…

Fernandez urged people not to get angry at the lockdown, but rather at the disease, as he looked to head off discontent over the economic impact the health crisis has had on businesses…”

https://www.metro.us/argentina-tightens-buenos-aires/


The coronavirus pandemic has been especially devastating for workers in Brazil’s vast informal sector, where millions of people have no financial safety net.”

https://www.sbs.com.au/news/informal-workers-in-brazil-are-having-to-choose-between-hunger-and-risk-of-infection


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Venezuelans who fled an economic collapse in their country have begun returning home as neighbouring Colombia restricts economic activity to prevent the spread of COVID-19.

“The decision has left many migrants without money, making it difficult to buy food or pay rent. But heading back home is also a challenge for many.”

https://www.aljazeera.com/news/2020/06/venezuelans-returning-home-colombia-economic-lockdown-200628160104629.html


Mexico’s economy posted a record contraction in April, official data showed on Friday, as the effects of the coronavirus lockdown devastated economic activity, particularly in manufacturing.”

https://uk.reuters.com/article/us-mexico-economy-gdp/mexican-economy-contracts-record-17-3-in-april-idUKKBN23X1M6


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Dutch troops were been sent into the Caribbean island of Curacao to assist local police in keeping unrest in check, broadcaster NOS reported on Saturday.

“The move follows days of violent protests against Covid-19 layoffs which saw demonstrators looting stores and storming the government palace on the island.”

https://nltimes.nl/2020/06/27/dutch-deploy-troops-quell-curacao-riots


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Rating agency Moody’s said late last week that South Africa’s goal to bring its surging debt load under control ‘will be very difficult to achieve’ and ‘unlikely’.

“That may seem like a statement of the obvious, but it is telling that it was made by Moody’s.”

https://www.dailymaverick.co.za/article/2020-06-28-moodys-casts-doubts-on-south-africas-bid-to-stabilise-debt/#gsc.tab=0


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Police and residents have clashed over wearing face masks in a small town in Kenya’s Rift Valley.

“A witness says three people were killed, the Associated Press reported. Police confirmed the deaths.”

https://www.telegraph.co.uk/news/2020/06/27/watch-violent-clashes-erupt-kenyan-police-protesters-wearing/


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The fallout of the Covid-19 pandemic on Indian economy will be more disastrous than estimated earlier, according to international financial institutions and economists.

“The latest institution to sound the alarm bells for Asia’s third largest economy is the S & P Global Ratings that said on Friday that the Indian economy is in deep trouble…”

https://www.hellenicshippingnews.com/indias-economy-in-deep-trouble-sp/


Profits of China’s major industrial firms dropped 19.3 percent year on year in the first five months of 2020 due to the COVID-19 impact, official data showed on Sunday.”

https://www.shine.cn/biz/economy/2006281001/


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Hawkish Chinese military strategists have called on Beijing to be better prepared for an escalation in its border dispute with India, saying the potential for armed conflict between the two nuclear powers is on the rise.”

https://www.scmp.com/news/china/military/article/3090855/prepare-india-border-row-escalate-chinese-strategists-warn


At a time when anger is brewing against China over its ‘expansionist’ policies that have affected India, Japan and other South Asian nations, massive protests took place in Japan demanding that Chinese president Xi Jinping be replaced with a democratically elected ‘ responsible leader’.”

https://www.timesnownews.com/international/article/protests-in-japan-demand-replacement-of-xi-jinping-with-a-democratically-elected-responsible-leader/613471


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Thailand’s banking sector has been disrupted yet again, but this time it’s not a sophisticated new technology creating turbulence.

“Rather, it’s a microscopic virus that induces fear of immense collateral damage that could shake the country’s financial pillars to its core.”

https://www.bangkokpost.com/business/1942512/on-guard-against-contagion


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An economist has warned that a banking crisis is coming to Malaysia and urged the government to set up an agency to work towards lightening it.

https://www.freemalaysiatoday.com/category/nation/2020/06/27/banking-crisis-imminent-warns-economist/


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Philippines — A deeper economic slump looms in the second quarter, with gross domestic product (GDP) contracting by as much as 6.7 percent due to the full impact of the tight lockdown aimed at preventing the spread of the coronavirus disease, the Bangko Sentral ng Pilipnas said.

BSP Governor Benjamin Diokno said… “The negative impact of the COVID-19 crisis is harsher than what was originally thought.””

https://www.philstar.com/business/2020/06/28/2024154/philippines-sinks-recession


“…we need to very quickly disabuse ourselves of the notion that [Australia’s] economy will “snap back” in 2021 and all will be well.

https://www.theguardian.com/business/commentisfree/2020/jun/28/its-time-our-political-leaders-face-reality-and-admit-australia-is-in-a-deep-recession


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The United Nations World Food Programme (WFP) warned Friday that Syria is facing an unprecedented hunger crisis, reporting 9.3 million civilians lacking adequate food in the civil war-stricken country.”

https://www.aa.com.tr/en/europe/un-warns-of-unprecedented-hunger-crisis-in-syria/1891457


The UN has warned that millions of Yemeni children are at risk of starvation because of “huge” shortfalls in humanitarian funding at a time that the coronavirus pandemic has caused the near total collapse of the war-ravaged Arab state’s health system.”

https://www.ft.com/content/bf963377-12cf-4ace-8aa5-484f18b603ba


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Zimbabwe has faced a lot of disruption this year – from drought to Covid-19 pandemic the situation could not have been worse for the landlocked African country

The country currently needs over $300 million to feed eight million Zimbabweans. And there are… cases where children are simply dying of starvation.”

https://zwnews.com/zimbabwes-economic-devastation-leading-to-starvation/


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“…central banks have gone even deeper down the monetary rabbit hole

Yet ever more QE is deeply counterproductive. Hosing economies with liquidity doesn’t make them grow faster.

“That’s like trying to get fat by buying a bigger belt.”

https://www.telegraph.co.uk/business/2020/06/27/quantitative-easing-has-created-monetary-hall-mirrors/


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In the United States since 1928, there has been only one instance when the stock market declined at least 20 percent in one quarter and rose at least 20 percent in the next, according to data supplied by Bespoke Investment Group, an independent market research firm.

That was in the heart of the Great Depression in 1932, an era of misery and staggering unemployment. It’s not a year that anyone wants to see again.”

https://www.nytimes.com/2020/06/26/business/stock-market-prices-irrational.html?ref=oembed


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The full extent of the economic recession probably will not become apparent until this fall and winter, when it will most likely come as another shock, because the world is no longer accustomed to such dramatic contractions. Both psychologically and in real terms, we are accustomed to continuous growth.

Will richer countries in the West and Asia be able to deal with a deep, widespread, prolonged recession or even depression? Even if trillions of dollars in stimulus spending proves sufficient to offset a full collapse, the question will be what comes next.”

http://www.koreatimes.co.kr/www/opinion/2020/06/197_291913.html


The challenge facing us in the coming months is altogether broader and now equally in need of attention: debt default on a massive scale.”

https://www.scotsman.com/health/coronavirus/bill-jamieson-fear-massive-debt-default-should-concentrate-minds-2897149


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This summer will usher in some of the worst catastrophes the world has ever seen if the pandemic is allowed to spread rapidly across countries already convulsed by growing violence, deepening poverty and the spectre of famine, the BBC war reporter Lyse Doucet has warned.”

https://www.theguardian.com/world/2020/jun/27/toxic-mix-of-violence-and-virus-sweeps-poorest-countries-warns-war-reporter-lyse-doucet


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