“Life after the coronavirus is obviously going to be extremely challenging for governments, businesses and households and will create some diabolical dilemmas for central banks as they try to grapple with the balance between unsustainable levels of debt, the ambition of economic growth and the risk of financial bubbles that could ignite another financial crisis while the world remains vulnerable…
“Globally, but especially in the advanced economies – and most particularly in the US – debt levels were already at historically levels even before the coronavirus outbreak…
“Global public debt is now the highest in recorded history... central bankers could ignite another financial crisis when the combination of unsustainable debt levels and swollen bubbles in equity markets collide…”
“Rock-bottom interest rates and preparations for a spike in loan defaults are hitting big banks.
“From JPMorgan Chase, the nation’s largest bank in terms of assets, to Goldman Sachs and Citigroup, the country’s biggest lenders are stockpiling billions of dollars to hedge against bad debt.”
“Despite the housing market continuing to heat up as economies reopen, the recession driven by the coronavirus pandemic has upended the plans for many first-time buyers eager to invest in a new home. A survey… found that 22 million [US] adults put off buying a home as a direct result of the national crisis.”
“Failed businesses and lost loved ones, empty theme parks and socially distanced funerals, a struggling economy and an unmitigated public-health disaster: This is the worst-of-both-worlds equilibrium the United States finds itself in…
“The next, terrifying phase of the coronavirus recession is here: a damaged economy, a virus spreading faster than it was in March.”
“California’s Top Oil Driller Files for Bankruptcy Protection.
“California Resources Corp. filed for bankruptcy, kicking off what could turn into the next wave of collapses among oil drillers and the businesses that depend on them.”
“Concerns are mounting over the pace of Britain’s economic recovery as the government prepares to wind down its furlough scheme from next month…
“Almost a third of UK companies plan to make job cuts in the next three months as the government prepares to wind down its furlough scheme, one of Britain’s leading business lobby groups has warned.”
Oh, the irony!
“The Guardian has announced plans to make job cuts in both editorial and commercial roles, as the economic shock caused by the coronavirus pandemic continues to impact the media industry.
“The proposals could affect up to 180 jobs – 110 in departments such as advertising, Guardian Jobs, marketing roles, and the Guardian Live events business, with 70 coming from editorial.”
https://www.theguardian.com/media/2020/jul/15/guardian-announces-plans-to-cut-180-jobs
“The [UK] government must take urgent action to prevent a wave of defaults on £35bn of corporate debt taken on during coronavirus wreaking havoc in the economy, a new report backed by some of the City’s biggest names has said.
“Policymakers should create a “UK Recovery Corporation” to turn risky debts into more manageable forms like tax liabilities or shares…”
https://www.cityam.com/government-must-tackle-35bn-corporate-debt-crisis-say-city-bosses/
“The food sector’s resilience during the coronavirus crisis does not mean the UK won’t face food shortages if it fails to agree a trade deal with the EU by the end of the year, Arla’s UK boss has warned.
“A deal that minimised tariffs and non-tariff barriers would be the “only way to meet demand” on many key staples currently imported from the bloc, warned Arla…”
“European leaders [face a critical task] on Friday as they gather to discuss a mooted €750bn coronavirus recovery package and the EU budget.
“Mr Sánchez and other leaders face stiff opposition from the “frugal four” — Denmark, Sweden, Austria and the Netherlands — that want a smaller rescue fund and budget cuts as the price for doing a deal. “
https://www.ft.com/content/2d21bcb4-7271-474c-93d0-0dc75f5c7997
“New passenger-car registrations fell 24% yoy in June, the European Automobile Manufacturers Association said Thursday.
“That’s an improvement on May’s 57% slump and April’s 78% drop. With sales still well below last year’s levels, hopes are fading for a V-shaped recovery.”
“South Korea’s automaking habitat is coming down, with 60 percent of parts suppliers to Korea’s finished carmakers forced to shed workers as 72 percent struggle in liquidity woes amidst shriveled workload.
“…33 firms or 60 percent was readying massive layoffs or furlough.”
https://pulsenews.co.kr/view.php?year=2020&no=729332
“South Korea’s central bank kept its key policy rate on hold at a record low on Thursday…
“Governor Lee Ju-yeol also painted a bleak outlook for the trade-reliant economy due to weaker exports, suggesting the BOK was likely to hold back its monetary policy ammunition for a long-haul fight against the coronavirus pandemic.”
“Shutdowns to prevent the spread of coronavirus from Melbourne have set back chances of a rebound in the nation’s jobs market, as figures revealed almost 1 million Australians were without paid work…
“Prime Minister Scott Morrison conceded the “fight” to get people back into work would be challenged by efforts to bring the virus to heel.”
“New Zealand consumer prices fell by the most in four years last quarter as much of the economy closed to fight the coronavirus, while a collapse in global oil prices dragged petrol costs down sharply…
“Thursday’s data came with a statistical health warning as goods and services simply could not be bought in April and May, so prices for them had to be imputed.”
“The effect of the virus on the retail and services sectors has hammered China’s consumption, with official retail sales down 11.4 per cent in the first half…
“That has prompted Beijing to boost growth through debt-fuelled investment, as it did in the wake of the global financial crisis.
“A decade ago, some economists liked to describe the Chinese economy as a bicycle that needed to maintain a certain speed or it would tip over and crash [this is actually applicable to the entire global economy].
“Today it is more like a bicycle laden with enormous boxes of debt, ridden by a drunk and with strategic competitors such as the US trying to knock it over.”
https://www.ft.com/content/ef2ac2d3-6389-4ac6-8608-90dbc3e68465
“China has avoided a recession, but debt problems are piling up.”
“Paying top dollar for land when money’s cheap and then selling apartments at a premium seems like a viable business model. Until a global pandemic brings both housing and capital markets to a standstill. China’s developers are learning this the hard way.
“Tahoe Group Co. is a case in point. The Fuzhou-based home builder, known for its luxury villas, last week became the first large residential developer in China to default on a bond in five years.
“Market watchers say there may be more to come.”
“Growth rates for Laos… will collapse to near zero as a consequence of the global coronavirus recession.
“Most terrifyingly, this will mean that Laos, which had a relatively stable economy, will slip into debt and chaos.”
https://www.laprogressive.com/laos-financial-defeat/
“A historic recession in Latin America will likely drag on…
“The number of deaths from the coronavirus in Latin America has exceeded the figure for North America for the first time since the start of the pandemic, a Reuters count showed this week.”
https://finance.yahoo.com/news/latin-americas-recession-drag-brazil-114340102.html
Lots more of this to come, I’m afraid:
“Protesters in Santiago defied a citywide lockdown meant to combat the spread of the coronavirus, barricading roads and looting early into the morning on Wednesday in support of a proposal to allow Chileans to withdraw part of their pensions amid the crisis.”
“Major protests are breaking out against governments in several countries after coronavirus sparked fury over grievances including economic problems and alleged corruption or incompetence.
“Demonstrators have taken to the streets to voice their anger at perceived failures by leaders to rise to the unprecedented challenges heightened by the pandemic.”
https://edition.cnn.com/2020/07/15/world/protests-israel-serbia-bulgaria-coronavirus-intl/index.html
“The price of bread in Lebanon has gone up for the first time in eight years — the latest troubling sign that the country’s financial crisis is spinning out of control…
“Since the financial crisis began in October, prices have gone up on many food items, from meat to sugar — and now bread. Nationwide, subsidized bread prices rose from 1,500 lira to 2,000 — a 33% increase.”
https://www.businessinsider.com/lebanon-financial-crisis-economy-bread-prices-2020-7?r=US&IR=T
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