“IMF Managing Director Kristalina Georgieva and chief economist Gita Gopinath said the ongoing economic recovery from the crisis was the result of the rapid implementation and unprecedented scale of government and central bank support, but more efforts would be needed.
““The recovery remains very fragile and uneven across regions and sectors. To ensure that the recovery continues, it is essential that support not be prematurely withdrawn,” the two economists wrote in the essay.” [À propos of nothing, looks rather messianic in that picture, doesn’t she?!]
“Amid the gloom of the coronavirus recession, even the good economic news tends to be bad. Take productivity. Its growth is soaring to rates not seen in half a century. Wage growth is accelerating, too. Normally, this would be a cause for celebration…
“Average wages aren’t growing because individual workers are getting raises. Instead, they are growing because so many low-wage workers have been laid off.”
https://uk.news.yahoo.com/u-productivity-soaring-hold-applause-103039932.html
“…small-business owners across DC were buoyed for months by an influx of funding from federal and local government programs and propelled by hope that gradual reopenings would breathe new life into their storefronts.
“But as summer stretched on, sales sputtered and pandemic-relief grants ran dry. Now, as Congress squabbles over how to help the millions of struggling businesses nationwide, owners of small firms across DC are left teetering on the edge of financial ruin.”
“This is… a more perilous phase for the US economy. In March and April, policymakers pulled out all the stops to staunch the economic bleeding. But there will be less policy support now if the economy again goes south.
“Although the Federal Reserve can always devise another asset-purchase programme, it has already lowered interest rates to zero and hoovered up many of the relevant assets.”
https://www.theguardian.com/business/2020/sep/10/us-covid-19-crisis-health-economy
“Speaking to the Financial Times, the European Central Bank (ECB) said that the central bank will deepen the pressure on the big European banks, asking them to prepare for Brexit once again as the summer draws to an end.”
https://www.fxstreet.com/news/ecb-and-big-banks-continue-to-clash-over-brexit-ft-202009090424
“The UK and EU are to hold emergency talks later as tensions rise over Boris Johnson’s move to override key parts of the Brexit withdrawal agreement. Cabinet Office Minister Michael Gove will meet EU official Maros Sefcovic in London to discuss how the development could affect the island of Ireland.
“The EU says it wants “clarifications” on the implementation of the agreement.” [No idea what Johnson’s government thinks it is going to accomplish with this gambit, which unfortunately makes us look very underhanded].
https://www.bbc.co.uk/news/uk-politics-54097320
“Nearly 125,000 retail jobs have been lost in the UK in the first eight months of this year, according to a fresh estimate, as major chains including Debenhams, Marks & Spencer joined independents in shutting stores.
“As many as 13,867 shops have closed permanently, including thousands of small stores employing 32,598, the Centre for Retail Research (CRR) said.”
“The chief executive of UK-based low-cost carrier EasyJet has warned that the lack of government support targeted at the airline industry is threatening the sector’s long-term competitiveness…
““This is the last chance to save the UK airline industry and ensure it is as vibrant and competitive after Covid as it was before,” he states. “I hope the Government takes it.””
““Continuing the trend of the past few weeks, the number of (global) scheduled flights operated this week is 47% below the number operated for the same week last year,” aviation data firm OAG said in a statement.”
“Two months into China’s fastest stock rally in years, and the days of making easy money are ending…
““Turnover and liquidity conditions are not aligning in the best place for the market right now,” said Shen Zhengyang, an analyst at Northeast Securities Co. “We’re halfway through a correction.””
“As the Covid-19-induced economic slowdown deepens, Indian banks have been preparing for the worst. But what they are considering worst might still be conservative…
“…analysts believe bad loans could eventually be much higher than the buffer created by banks so far.”
https://qz.com/india/1900272/indian-banks-bad-loans-will-be-much-worse-than-provisioning/
“Perez is one of more than 100,000 nurses in Venezuela who are struggling to make ends meet on salaries that have been decimated by rampant inflation, while also facing a heightened risk of contracting the coronavirus in a country where medical staff lack protective equipment and even running water.”
“South Africa faces a precipitous economic and political collapse by 2030 unless it changes its economic model…
“The economic impact of recurrent power cuts, rising unemployment and the loss of the last investment-grade rating on South Africa’s debt have only been exacerbated by the coronavirus outbreak.”
““When you have lost your leg, your home, your stability and certainty, nothing matters anymore. What else do you have to lose?”
“Refugees in Lebanon are struggling to cope with the deteriorating economic crisis, made worse by the pandemic. “
https://www.nrc.no/perspectives/2020/refugees-with-nothing-left-to-lose/
“Thousands of people urgently require emergency shelter and aid after a fire destroyed Europe’s largest refugee camp, on the Greek island of Lesbos.
“As the Athens government declared a state of emergency and a delegation of officials rushed to the north-eastern Aegean island, the sheer scale of devastation wrought by the overnight blaze became increasingly evident.”
“Act now to help more fragile countries weather the coronavirus crisis, or pay a far greater price later, the UN’s humanitarian chief has warned rich countries and global financial institutions.
“Lambasting the “tepid” response seen so far, Sir Mark Lowcock told The Telegraph that not taking more action now would lead to more poverty, starvation and child death across the world – the perfect conditions for conflict, insecurity and extremism to thrive.”
“Financial markets are being pulled in different directions by two big forces: the injection of liquidity from central banks and concerns over a “second wave” of Covid-19 infections. Daily news headlines can lead us to believe that, of the two, coronavirus is the dominant force for markets.
“The coming months are likely to show that it is not. Investors should back central bankers to win this tug of war, and set up their portfolios accordingly.”
[Says the FT]
https://www.ft.com/content/0a57283d-b001-419b-a442-a258ecd45e25
[The Washington Post begs to differ]
“Jerome Powell, chair of the Fed, has repeatedly said that his institution can’t keep equity and debt assets propped up if the economy continues to deteriorate.
“Businesses are still going bankrupt. Low- and moderate-income renters who are unemployed are preparing to fight evictions in the coming months, as moratoriums end. And workers in industries hardest-hit by the pandemic — think airlines and big hotel chains, among others — who initially kept their jobs are now joining the ranks of the unemployed.
“Amid all this, one thing remains clear: For Wall Street, too, there will be a reckoning.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back tomorrow with some more climate news.
