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The Next Global Depression Is Coming and Optimism Won’t Slow It Down… Depressions don’t just generate ugly stats and send buyers and sellers into hibernation. They change the way we live…

“This coronavirus has ravaged every major economy in the world. Its impact is felt everywhere…

“Social safety nets are now being tested as never before. Some will break. Health care systems, particularly in poorer countries, are already buckling under the strain. As they struggle to cope with the human toll of this slowdown, governments will default on debt.

“For all these reasons, middle-income and developing countries are especially vulnerable, but the debt burdens and likelihood of defaults will pressure the entire global financial system.”

https://time.com/5876606/economic-depression-coronavirus/


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Another 1.18 million people in the US filed for unemployment benefits last week as economists worry the expiration of enhanced unemployment benefits will lead to a sharp drop-off in household spending and set back the US economy’s near-term recovery.”

https://www.theguardian.com/business/2020/aug/06/us-unemployment-august-benefits-expire-coronavirus


President Trump said Thursday he plans to sign sweeping executive orders “tomorrow afternoon” if Democrats won’t agree to a new coronavirus stimulus bill.”

https://nypost.com/2020/08/06/trump-threatens-executive-order-on-covid-19-stimulus-bill/


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“Throughout the second half of the year, the US economy is expected to be operating alongside the nation’s wide-spread epidemic, racial tensions and domestic factionalism. Potential social risks brought about by the three issues will further hinder the economic recovery of the US…

“As the world’s largest economic entity, the US recession will directly drive down the growth rate of the global economy. Since the US has maintained close economic and trade ties with most of the major economies around the world, its recession will lead to a drastic plunge in global demand, further causing contractions in trade and investment of those economies.”

https://www.globaltimes.cn/content/1197003.shtml


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President Donald Trump signed an executive order on Thursday directing some federal agencies to prioritize purchasing certain drugs and medical materials when made in the United States

“It comes after an initial scramble within the United States to obtain medical supplies and equipment at the start of the coronavirus pandemic, much of which has been produced or sourced from abroad.”

https://edition.cnn.com/2020/08/06/politics/donald-trump-medical-manufacturing-executive-order/index.html


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Ottawa will impose retaliatory tariffs on U.S. goods in response to President Donald Trump’s decision to restore a 10 per cent tariff on Canadian aluminum imports.

“Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland announced the measures Thursday evening hours after Trump said he would impose the tariffs…”

https://www.cbc.ca/news/business/trump-aluminum-tariff-1.5677036


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U.S. President Donald Trump has unveiled sweeping bans on U.S. transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok, escalating a high-stakes confrontation with Beijing over the future of the global tech industry

““This is the rupture in the digital world between the U.S. and China,” said James Lewis, a technology expert with Washington-based think tank Center for Strategic and International Studies. “Absolutely, China will retaliate.””

https://uk.reuters.com/article/uk-usa-wechat-trump/trump-issues-bans-on-chinas-tiktok-wechat-stoking-tension-with-beijing-idUKKCN25304F


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Britain is facing the most severe recession since the aftermath of the First World War, according to the Bank of England…

“It warned the economy will recover more slowly than hoped, with around 1.2million workers still facing losing their jobs.”

https://www.dailymail.co.uk/news/article-8601891/Worst-recession-100-years-not-300-years-feared-Bank-England-predicts.html


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Britain’s most vulnerable firms are facing a £50billion cash-flow crisis which will fuel a surge in insolvencies and a fresh wave of job losses, the Bank of England warned…

“…worse is to come, as firms which have racked up huge debts or were already weak when the crisis hit are pushed over the edge.”

https://www.thisismoney.co.uk/money/news/article-8601307/Britain-faces-tsunami-insolvencies-amid-50bn-cash-flow-crisis.html


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Lebanese security forces fired teargas at demonstrators in Beirut, as rage over the country’s leadership grew following a massive explosion that laid waste to large parts of the capital on Tuesday…

“Protesters had gathered near parliament… Shock has turned to anger in the city…”

https://www.theguardian.com/world/2020/aug/07/beirut-explosion-lebanon-security-forces-fire-tear-gas-at-protesters-as-anger-mounts-over-blast


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Two dozen democracy advocates in Hong Kong were charged on Thursday with taking part in an annual vigil honoring the victims of the 1989 Tiananmen Square protests, the latest sign of the aggressive clampdown on dissent in the semiautonomous Chinese territory

“The charges came on the heels of a politically fraught week as the authorities in Beijing and Hong Kong invoked a sweeping new national security law to crack down on the opposition.”

https://www.nytimes.com/2020/08/06/world/asia/hong-kong-tiananmen-protest.html


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Baoshang Bank, the centrepiece of Chinese oligarch Xiao Jianhua’s Tomorrow Group, will be forced into bankruptcy

“Baoshang Bank was put under the Chinese government’s ward in May 2019, part of an onerous process by the financial and banking regulators to clean it up, recapitalise and resuscitate it to avoid a whole scale collapse in China’s financial system.”

https://www.scmp.com/business/china-business/article/3096443/chinas-central-bank-declares-baoshang-bank-bankrupt-it


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“As the months-long pandemic is taking a heavy toll on South Korea, the economy has slumped into a recession, delivering the worst performance in over two decades…. Economic lockdowns in major import countries were the biggest drag on the growth of Asia’s fourth-largest economy as it marked a 13.6 percent plunge in exports. This is the sharpest year-on-year decline in exports since 1974…”

Photos of crisis fatigue in South Korea:

http://www.koreatimes.co.kr/www/nation/2020/08/510_294026.html


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Japan’s benchmark bond, once a landmark for negative rates, is holding above 0% even as the world’s pile of negative-yielding debt surges. A perception that the Bank of Japan won’t cut rates, limited foreign demand…

The amount of bonds with negative yields globally has jumped over 40% this year to almost $16 trillion.”

https://www.bloomberg.com/news/articles/2020-08-06/japan-s-bonds-hold-above-0-even-as-more-debt-goes-negative


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A collapse in real yields — the return that bond investors can expect once inflation is taken into account — is rippling through global financial markets and driving record rallies in assets from gold to technology stocks, investors say…

““There isn’t an interest rate anywhere in the world that looks attractive once you take inflation into account,” said David Vickers, a multi-asset portfolio manager at Russell Investments. “That makes just about everything else seem more appealing.””

https://www.ft.com/content/2895520f-5d23-4add-a431-7cc954fb78a4


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Gold was headed for its best week since the global financial crisis as investors weighed up the latest potential flare-up in tensions between Washington and Beijing…

“The precious metal, which often serves as a haven in times of uncertainty, is on track for its strongest weekly rise since November 2008.”

https://www.ft.com/content/4f81a8f9-39b7-47fc-a1f8-8f5479a3f96e


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Glencore became the first major mining company to scrap its dividend, saying on Thursday the economic outlook was too uncertain because of the coronavirus pandemic and that it would prioritise cutting debt instead…

“Glencore ended up posting a net loss of $2.6bn – the same amount it had been due to pay in dividends.”

https://www.aljazeera.com/ajimpact/glencore-major-mining-company-scrap-dividend-200806133717788.html


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“High-profile bankruptcies, refinancing deals, and drastic cost-cutting involving the likes of Brooks Brothers, JCPenney, Hertz, Neiman Marcus, Ford, and GM are testament to the financial distress wrought by the Covid-19 pandemic.

“But a less visible crisis deep within supply chains is destabilizing small and medium-sized enterprises and could add to the woes of the global economy.”

https://hbr.org/2020/08/a-financial-crisis-is-looming-for-smaller-suppliers


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This ‘dire’ economic situation ‘deserves to be called a depression — a pandemic depression’

Don’t confuse ‘a rebound for a recovery’, say economists Carmen Reinhart and Vincent Reinhart.”

https://www.marketwatch.com/story/coronavirus-collapse-is-nothing-less-than-a-depression-a-pandemic-depression-warn-top-economists-11596728170


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