My dear Patreons and visitors, I will be alternating climate and economic threads on a daily basis from now on, rather than doing both every day. Today is an “economic” day and so tomorrow will be a “climate” day etc.
We won’t miss any important articles as I will search back 48 hours for each thread. The idea is that this will free me up to provide more analysis and even some video content for subscribers. Thank you for bearing with me and, if you do, bless you for subscribing! JP
“Why Apple hit $2 trillion in the middle of an economic catastrophe:
“In the time it has taken Apple to go from one to two trillion dollars, the company has released no major new products… Profits have actually fallen, from $13.3bn (£10.2bn) to $13.1bn. This year, the global economy is due to contract heavily, and millions have become unemployed.
“These do not seem like conditions in which a company would double in value, but an unprecedented combination of events – many of them outside Apple’s own control – has made it the world’s most valuable company.
“Central banks around the world have stepped in with trillions of dollars of emergency stimulus measures to keep businesses running: cheap loans and bond buying programmes have pushed yields to record lows. As a result, investors seeking financial returns have turned towards the stock market, pushing shares to record highs.
“Apple’s price to earnings ratio – a measure of how highly valued a company is relative to its financial performance – now sits at its highest level since 2007, before the financial crisis.”
America’s stock market has swiftly recovered from the pandemic. Sophisticated investors don’t think the real economy will do the same.“
“Just 17% of fund managers expect a rapid V-shaped economic recovery, according to a Bank of America survey released Tuesday.”
‘A growing sense of panic’ with no fresh federal relief in sight:“
“It’s been four months since most of the federal government’s $1,200 stimulus checks went out. The $600 a week federal boost to unemployment benefits expired three weeks ago, along with a moratorium on evictions. Many small businesses have already spent the money from their federal emergency loans.”
In a desperate plea for help, the US hotel industry said it faces a default disaster, in which 25% of hotels are at risk of foreclosure.“
“The report, sent to Congress this week and compiled by Trepp, shows that the percentage of hotel loans 30 or more days delinquent is 23.4% as of last month — the highest percentage on record.”
HSBC shoots down Bank of England’s optimism over the economy predicting it will shrink by 10.3% in 2020. “
“Britain’s biggest lender has taken issue with predictions from the Bank of England that the economy may recover to pre-coronavirus levels by the end of 2021.”
Concern is growing in Germany that a rule introduced as a part of the country’s emergency response to coronavirus is fuelling the creation of thousands of so-called zombie firms that could end up sapping the economy for years to come.“
“Under a government waiver introduced in March, German companies adversely affected by the pandemic do not have to file for insolvency.”
The collapse of a Mexican lender is spurring concern about risks for the banking system just as the country sinks into its deepest recession in almost a century under the watch of a financial regulator that’s been hobbled by austerity… “
“Banco Famsa will need a bailout of almost $1 billion… The threat to banks has grown amid Mexico’s pandemic-driven recession…”
“In its decades-long effort to prod financiers to loosen up and lend more to defeat deflation, the Bank of Japan (BOJ) is trying a new tack: incentivizing them with bonuses.”
As the first signs emerge of enforcement action linked to disgraced Singapore oil trader Hin Leong, court documents have revealed the extent to which the company had become dependent on fake trades, forged documents and dubious financing to help cover up vast accumulated losses.”“
Offshore oil servicers are going bust at the fastest pace in three years as explorers spurn high-cost drilling to deal with a worldwide slump in commodity prices… “
“Noble Corp. and Diamond Offshore Drilling Inc. have filed for Chapter 11 since the start of the pandemic-driven oil downturn…”
“Valaris Plc became the latest casualty of the global slump in oil prices, filing for bankruptcy Wednesday as the world’s largest offshore rig owner by fleet size seeks to restructure a roughly $7 billion debt load.”
A push by President Donald Trump and the world’s biggest oil producers to shore up crude prices has failed to stop an avalanche of bankruptcies in the industry, and more are still to come. “
“The Covid-19 pandemic’s devastating effect on the oil market is rippling throughout the supply chain, from explorers to the companies that provide them with workers and equipment.”
“Chaparral Energy Inc.’s filed for bankruptcy protection for the second time in four years, paving the way for bondholders to take control of the Oklahoma driller in the aftermath of sluggish oil prices.”
a new study …concludes that systemic risk is not just a problem for financial institutions. “…
“In “Systemic Risk in the Broad Economy,” released earlier this summer, a team of Rand Corp. economists argued that systemic risk — the ability of small, seemingly isolated risks to grow and spread across heavily interconnected systems — extends beyond the financial sector.”
If 2005 is the year we can see the old world on its way out, then 2008 is the year it was executed [interestingly and not unconnectedly this was around the time we were hitting some conventional crude oil supply limits]. “
“2008 is the year of the great crash, the first crisis of the global economy.
“The crash exposed not only structural flaws in individual economies, but also the structure of the global economy itself: financially interdependent, underpinned by the dollar and by the Federal Reserve as the lender of last resort, and with truly international supply chains.”