• Facebook
  • Twitter
“To date, the economic damage wrought by the pandemic has been mostly hidden by massive government subsidy. That’s about to change. And so the next few months will reveal the underlying economic impact of Covid-19 across the globe more clearly than we’ve seen so far.

“My bet: As governments withdraw fiscal support, the economic picture is going to look worse than commonly appreciated.”

“Getting a sense of what’s about to happen requires that we first be clear about how and why the pandemic has affected the economy: Is it because governments have required people to stay home, or is it because of the virus itself?

“New research shows that economic losses have come mainly from fear, not government mandate. So eliminating the mandates without ending the fear does very little.”

https://www.bloomberg.com/opinion/articles/2020-07-13/covid-fear-will-keep-the-world-in-a-slump


  • Facebook
  • Twitter
The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues…

“For the first nine months of this budget year, which began Oct. 1, the deficit totals $2.74 trillion, also a record for that period.”

https://www.cnbc.com/2020/07/13/us-budget-deficit-hits-all-time-high-of-864-billion-in-june.html


  • Facebook
  • Twitter
Private investment firms that manage the fortunes of wealthy individuals and their kin were approved for millions of dollars in taxpayer-funded relief loans designed to help small businesses weather the coronavirus lockdown, according to a review of recently released government data.”

https://www.reuters.com/article/us-health-coronavirus-ppp-familyoffice/amid-pandemic-wealthy-u-s-families-approved-for-government-loans-idUSKCN24E130


  • Facebook
  • Twitter
Four months into the worst recession since the Great Depression, tens of thousands of workers like Herdez across the country have filed for jobless claims but have yet to receive payments. Many are now in dire financial straits.

““We’ve been only able to make half payments on everything,” Herdez said in an interview.”

https://www.washingtonpost.com/business/2020/07/13/unemployment-payment-delays/


The coronavirus pandemic stripped an estimated 5.4 million American workers of their health insurance between February and May, a stretch in which more adults became uninsured because of job losses than have ever lost coverage in a single year, according to a new analysis.”

https://www.nytimes.com/2020/07/13/us/politics/coronavirus-health-insurance-trump.html


  • Facebook
  • Twitter
Crude oil production has already peaked in the United States, according to a leading independent oil producer in the U.S. shale patch.

“Chief executive of Parsley Energy Matt Gallagher said that the peak production that the United States hit back in March—13.1 million bpd on average—represented shale’s glory days, ne’er to be repeated…”

https://oilprice.com/Latest-Energy-News/World-News/Shale-CEO-US-Has-Passed-Peak-Oil.html


  • Facebook
  • Twitter
Interestingly enough… Chevron said that it would write down as much as $10-11 billion in assets last December

“At the time, some analysts saw Chevron’s announcement as a harbinger for bad news for the whole industry. It made perfect sense: if Chevron could not turn in a profit from deepwater oil and shale gas at those oil prices, how likely would its peers be profitable in that environment?

“That question never got an answer because just three months later, the Saudi-Russian price war led to an implosion in oil prices, and then the coronavirus pandemic added its own rather hefty weight to push them further down.”

https://oilprice.com/Energy/Energy-General/The-Wave-Of-Big-Oil-Write-Downs-Is-Far-From-Over.html


  • Facebook
  • Twitter
London’s tourist industry today warned the Prime Minister it might never recover from the collapse in business caused by lockdown.

“Key players including hotel chains and tourist attractions urged Boris Johnson to fund a massive marketing campaign to promote the capital.”

https://www.itv.com/news/london/2020-07-13/londons-tourism-industry-may-never-recover-from-the-collapse-in-business-caused-by-lockdown


  • Facebook
  • Twitter
Battered small businesses [UK] will be forced to slash 1.4m jobs without decisive action by ministers to rescue the economy, according to new research.

“More than three-fifths of small and medium firms have already launched redundancies or are planning to do so…”

https://www.telegraph.co.uk/business/2020/07/13/exhibition-industry-fears-30000-jobs-will-go-without-reopening/


  • Facebook
  • Twitter
Victorians [Australia] have slashed spending again as stage-three COVID restrictions have been reimposed in parts of the state

“The health crisis in Victoria may be dampening household sentiment in the rest of Australia too, because household spending growth has also eased in every other jurisdiction in the last week, except the Northern Territory.”

https://www.abc.net.au/news/2020-07-14/victorians-close-wallets-as-coronavirus-shutdowns-bite/12453044


  • Facebook
  • Twitter
I’ve long wondered what would happen if a poor or emerging market nation attempted some manner of MMT. Looks like Indonesia will be a test-case:

“Indonesia’s experiment to borrow money for free from the central bank has excited proponents of modern monetary theory and raised concerns about its effects on inflation and the rupiah… the lack of clarity on the tenor of bonds the Bank of Indonesia will buy and how it will subsequently get rid of these bond holdings have analysts worried.”

https://uk.reuters.com/article/us-indonesia-policy-rupiah/indonesias-debt-sharing-experiment-worries-rupiah-investors-idUKKCN24E1BU


  • Facebook
  • Twitter
Singapore’s trade-reliant economy plunged into recession in the second quarter with a record contraction …as the coronavirus crisis exacts a heavy toll on business and demand…

“…the grim numbers for the wealthy city-state – a bellwether for the global economy – underscore the sweeping worldwide impact of the COVID-19 pandemic and point to an arduous road ahead.”

https://www.reuters.com/article/us-singapore-economy-gdp/pandemic-knocks-singapore-into-recession-as-gdp-plummets-41-in-second-quarter-idUSKCN24F004


  • Facebook
  • Twitter
Passenger vehicle sales in India slumped 49.6% in June, the first full month of economic activity after a two-month nationwide lockdown

“It will take as many as four years for India’s automobile industry to reach volumes last seen in the year to March 2018, and even that estimate is optimistic, Rajan Wadhera, president of SIAM, told reporters.”

https://www.bloomberg.com/news/articles/2020-07-14/slump-in-car-sales-shows-pain-persists-for-modi-s-economy


The economic outlook for the Middle East and North Africa (MENA) was already grim… On Monday, that horizon darkened further as the International Monetary Fund (IMF) projected an even deeper recession for the region, and warned of the spectre of rekindling social unrest as inequality and poverty deepens.”

https://www.aljazeera.com/ajimpact/imf-warns-deeper-mena-recession-rising-social-unrest-risks-200713134729418.html


  • Facebook
  • Twitter
A top former finance official alleged that Lebanese banks “smuggled” out close to $6 billion since October despite blocking transfers abroad as the country plunged into financial crisis, the Financial Times reported…

“Bifani accused politicians and bankers of trying to “benefit from the system without taking any loss” while making the Lebanese take the brunt of the collapse.”

https://english.alarabiya.net/en/business/banking-and-finance/2020/07/13/Former-Lebanon-finance-head-says-banks-smuggled-6-billion-out-FT


  • Facebook
  • Twitter
Tunisia has asked four countries to delay debt repayments, it said on Monday as it announced more pessimistic economic and budget forecasts for 2020 because of the coronavirus pandemic.

“It is negotiating with Saudi Arabia, Qatar, France and Italy to push back the payments…”

https://uk.reuters.com/article/us-tunisia-economy-2020/tunisia-seeks-late-debt-payments-as-crisis-hits-economy-state-budget-idUKKCN24E18V


  • Facebook
  • Twitter
Group of Seven finance ministers on Monday called for full implementation of a G20 freeze in debt service payments by all official bilateral creditors, amid growing pressure on China’s state-owned banks and enterprises to join the relief effort.

“…the G7 ministers underscored the need for greater transparency about lending, a U.S. Treasury spokesperson said, an apparent reference to confidentiality clauses included in many Chinese loans to developing countries in Africa and elsewhere.”

https://uk.reuters.com/article/uk-health-coronavirus-g7/g7-ministers-urge-full-implementation-of-g20-debt-freeze-u-s-treasury-idUKKCN24E1U3


  • Facebook
  • Twitter
Ecuador’s austerity-minded government is in discussions with China to secure a new loan backed by oil sales.

“The fresh loan of at least $1.4bn would be secured by some 50mn bl of crude sales under a long-term arrangement…”

https://www.argusmedia.com/en/news/2122758-ecuador-seeking-new-oilbacked-loan-from-china


  • Facebook
  • Twitter
Birka Cruises, which has been sailing for almost half a century, has announced that it is ceasing operation, citing “the financial impact of Covid-19” along with uncertainty facing the industry.

“Cruise experts said this shows how “fragile” the industry is after months without passengers, and that other lines may not survive.”

https://www.telegraph.co.uk/travel/cruises/news/cruise-line-in-europe-shuts-down-coronavirus/


The economic fallout of the coronavirus pandemic means global IT spending is projected to slump by 7.3% compared with 2019, according to research firm Gartner.”

https://www.verdict.co.uk/it-spending-2020-coronavirus/


Historically low natural gas prices from Asia to Europe and lower demand in the pandemic have resulted in U.S. exports of LNG crashing by more than 50 percent this year, the EIA said last month.”

https://oilprice.com/Latest-Energy-News/World-News/US-Natural-Gas-Prices-Hit-Record-Lows-In-H1-2020.html


  • Facebook
  • Twitter
Video of migrant workers rioting at Gazprom plant in Siberia due to unpaid salaries

[We have already seen thousands protesting against Putin in the same part of the world this weekend]:

https://thesaxon.org/the-plant-of-gazprom-in-russia-rebelled-thousands-of-migrant-workers-video-of-riots/10769/


There are already plenty of worrying signs: a record-breaking pace for corporate bankruptcies; job losses moving from small and medium-sized firms to larger ones; lengthening delays in commercial real estate payments; more households falling behind on rents and continuing to defer credit card payments; and a handful of developing countries delaying debt payments.”

https://www.ft.com/content/fcfa2827-35c7-47fb-b5c1-c97f8c841a56


  • Facebook
  • Twitter
“Covid-19 increasingly appears all-consuming, with some major economies facing an unchecked outbreak.

“Meanwhile those that have bent the curve are meanwhile discovering that in an interconnected global economy, no one recovers till everyone does, as Bloomberg Economics’ global forecasts show.”

https://www.bloomberg.com/news/articles/2020-07-13/wary-china-consumer-u-s-recovery-hit-global-outlook-eco-day


  • Facebook
  • Twitter
Global hunger was increasing even before the coronavirus pandemic, the United Nations has warned, putting its Zero Hunger 2030 target in doubt.

“An annual study estimates almost 690 million people went hungry in 2019 – up by 10 million from 2018 and by nearly 60 million in five years.”

https://www.independent.co.uk/news/world/global-hunger-coronavirus-pandemic-united-nations-zero-hunger-2030-a9616186.html


You can read the previous ‘Economic’ thread here and visit my Patreon page here.

Share This

Share this post with your friends!