• Facebook
  • Twitter
As the world reels from the fiscal shockwaves of Covid-19, a new 26-country survey suggests that many people are perilously unprepared for a major economic jolt.

“According to the Organization for Economic Cooperation and Development’s 2020 International Survey of Adult Financial Literacy, 42% of the 125,787 adults polled reported worrying about meeting everyday expenses; 40% were concerned about their financial situation; and 37% reported they were just getting by.”

https://www.bloomberg.com/opinion/articles/2020-09-14/people-are-not-financially-prepared-for-the-next-economic-crisis


  • Facebook
  • Twitter
As households struggle to make ends meet, more Americans have been forced to halt or raid their retirement savings in this coronavirus-induced recession.”

https://www.cnbc.com/2020/09/14/americans-are-forced-to-raid-retirement-savings-during-the-pandemic.html


A debt crisis looms as renters turn to credit cards to stay afloat.”

https://crosscut.com/focus/2020/09/debt-crisis-looms-renters-turn-credit-cards-stay-afloat


Ever since the pandemic began closing down most American colleges, the rate of food insecurity among students has been rising — and it’s about to get much worse.”

https://www.yahoo.com/lifestyle/hungry-to-learn-soledad-obrien-investigates-college-student-hunger-crisis-homelessness-035925085.html


  • Facebook
  • Twitter
Gun sales… have continued to climb following widespread unrest in the country this summer. Many of these sales are from first-time gun owners, fearful of an uncertain future.”

Video:

https://uk.news.yahoo.com/gun-sales-surge-u-following-100006597.html


  • Facebook
  • Twitter
Economists warn of US ‘wasteland’ without stimulus deal – Hopes fade for $1tn or more in government aid for workers, businesses and local governments…

“The diminished chances of additional fiscal support have caused many economists to fret that the US rebound will lose steam in later 2020 or early 2021, creating a drag on the global economy as it tries to recover from the worst contraction since the second world war.”

https://www.ft.com/content/7f24c3ef-981e-40aa-bcae-79532fbd66ab


  • Facebook
  • Twitter
A Treasuries arbitrage strategy favored by hedge funds has fallen into near-hibernation, threatening liquidity in the world’s largest debt market

“The fate of the trade has crucial implications for the $20 trillion Treasury market, with the Federal Reserve already buying billions of dollars of U.S. obligations to keep it functioning smoothly.”

https://www.bloomberg.com/amp/news/articles/2020-09-14/a-vanishing-treasuries-trade-poses-threat-to-largest-debt-market


  • Facebook
  • Twitter
The debt treadmill that is the United States Treasury market is overheating. If you look closely, you can see the engine smoking now. Of course, the streets are littered with the bodies of traders that called the bond market top and lost.

“Nevertheless, here I’ll try to make the case from a mathematical standpoint that the US Treasury market could implode at any time now, and that only one final trigger is needed.”

https://seekingalpha.com/article/4374107-ugly-math-why-treasury-market-implode-time-now


  • Facebook
  • Twitter
UK firms are not ready for the “triple threat” of fresh local lockdowns, the wind-down of government support and Brexit disruption, a leading business chief has warned.

“Ruby McGregor Smith, president of the British Chambers of Commerce (BCC) has written to prime minister Boris Johnson warning of a “difficult winter ahead” even without a resurgence of the coronavirus.

“The letter comes as new figures show employers have axed 695,000 staff since March…”

https://uk.finance.yahoo.com/news/jobs-unemployment-uk-vacancies-cuts-government-support-230104385.html


  • Facebook
  • Twitter
British mortgage lenders are beginning to batten down the hatches for an oncoming spike in unemployment.

HSBC Holdings Plc, Barclays Plc and Natwest Group Plc have tightened restrictions on home loans for risky borrowers as officials unwind pandemic-support efforts. Then there’s the renewed prospect of a no-deal Brexit, threatening to deepen what’s already the worst recession in centuries.”

https://www.bloomberg.com/news/articles/2020-09-13/british-banks-brace-for-deeper-slump-by-pulling-mortgage-deals


Britain is in the grip of a long-term and widescale decline in the networks and institutions that constitute its social fabric with people less likely belong to a local group, be debt free or trust civic institutions, according to a new study.”

https://inews.co.uk/news/britain-social-fabric-fraying-urgent-attention-study-suggest-644422


  • Facebook
  • Twitter
As I described in January, many economists were predicting the end of Germany’s recent “economic miracle” even before Covid-19

“…it’s only when the tide goes out that you discover who’s been swimming naked. Germany can keeping pouring on money for a while longer, but it can’t prevent the ebb.”

https://www.washingtonpost.com/business/germanys-economy-is-sicker-than-you-think/2020/09/14/55393f40-f650-11ea-85f7-5941188a98cd_story.html


Europe’s Deep Economic Crisis Might Not Have a Solution… And that is a problem for the global economy. China, India and other emerging economies depend on Europe’s ability to import their goods for growth.”

https://moneyandmarkets.com/european-economy-crisis/


  • Facebook
  • Twitter
Turkey had its debt rating cut deeper into junk by Moody’s Investors Service, which warned of a possible balance-of-payments crisis in assigning the lowest grade it’s ever given to the country

“”Turkey’s external vulnerabilities are increasingly likely to crystallize in a balance-of-payments crisis,” London-based Moody’s analysts Sarah Carlson and Yves Lemay said in a report Friday.”

https://www.aljazeera.com/ajimpact/moody-warns-crisis-cuts-turkey-debt-rating-200914181458502.html


  • Facebook
  • Twitter
Small businesses fear collapse as Israel heads into second lockdownI still haven’t decided what I’m going to do, but many businesses on my street have already said they plan to open because if they don’t, they’ll go under,” said the owner of a store on Tel Aviv’s Ibn Gabirol Street.

““The government doesn’t understand that businesses will fail. Another month like this, it’ll all be over.””

https://www.haaretz.com/israel-news/business/.premium-small-businesses-fear-collapse-as-israel-heads-into-second-lockdown-1.9152660


  • Facebook
  • Twitter
…Modi imposed a draconian lockdown in late March with no warning and no planning. The prime minister seemed to revel in the drama of a primetime announcement and its muscular message.

But the national shutdown, which ended in June, destroyed millions of people’s livelihoods. Many of the most affected sit on the bottom rungs of Indian society…”

https://www.theguardian.com/commentisfree/2020/sep/13/the-guardian-view-on-indias-strongman-in-denial-about-a-covid-crisis


  • Facebook
  • Twitter
China’s retraining campaign offers scant prospects for the unemployed.

“Critics said the programme had failed to meet the needs of the market because of a lack of investment in the initiative as well as the ineffective state-dominated professional certification system.”

https://www.ft.com/content/51caf358-1058-4ee7-834a-c5b5cb8bf205


  • Facebook
  • Twitter
The Asian Development Bank (ADB) says the Covid-19 pandemic has pulled the region’s developing economies into recession.

“It is the first time in six decades that “developing Asia” – a designation that includes 45 countries – has seen a regional slump.”

https://www.bbc.co.uk/news/business-54157000


  • Facebook
  • Twitter
Bond investors in three of Asia’s biggest emerging markets are starting to push back against record increases in government borrowing, an ominous sign for policy makers

“As governments globally sell sovereign bonds faster than central banks can buy them, the warning signs from Mumbai to Seoul underscore the challenge to markets everywhere from ever-increasing debt.”

https://www.bloomberg.com/news/articles/2020-09-14/investors-push-back-on-emerging-asia-s-record-borrowing-spree


  • Facebook
  • Twitter
As tensions increase at the border between India and China, what is more, concerning is the economic collapse out of the rivalry relationship between the two nuclear-armed countries.

“This is because the economic relationship between the two neighbors is too profound to be overlooked.”

https://www.inventiva.co.in/stories/paayel/how-india-china-conflict-will-bring-a-halt-to-the-world-economy-may-even-put-it-on-standstill/


Countries coping with the coronavirus crisis and a slump in commodities prices are dipping into sovereign wealth funds for more than $100 billion, and that figure could swell as budget pressures mount for some emerging markets.”

https://uk.reuters.com/article/us-swf-assets-analysis/sovereigns-raid-rainy-day-funds-for-100-billion-after-covid-19-storm-idUKKBN2650SZ


Oil-rich Gulf nations are relying on a well-worn playbook of spending less and borrowing more to get through the coronavirus crisis but with the outlook for oil clouded by uncertainty the strategy is riskier than before.”

https://uk.reuters.com/article/us-gulf-economy-analysis/gulfs-fiscal-diet-risks-deeper-pain-amid-oil-price-uncertainty-idUKKBN2650GA


  • Facebook
  • Twitter
The economic hit from the coronavirus pandemic will hurt global energy demand harder and for longer than previously feared, the Organization of the Petroleum Exporting Countries said Monday.

In its monthly report, OPEC said it expects the pandemic to reduce demand by 9.5 million barrels a day, forecasting a fall in demand of 9.5% from last year.”

https://www.wsj.com/articles/opec-deepens-forecast-for-decline-in-global-oil-demand-11600083622


  • Facebook
  • Twitter
“SIDS (small island developing states) are sinking, and it’s not due to just the sea level rise and climate change. We are actually sinking in debt,” she said.

““COVID and the collapse of the tourism sector – basically, they just pushed us over the edge.”

“In a statement on debt, released in late June, AOSIS members said their economies – many of them reliant on tourism for up to 40% of GDP – were “in freefall”.”

https://uk.reuters.com/article/climate-change-islands-covid/hit-by-covid-and-climate-change-island-states-battle-debt-crisis-idINL8N2GB56Y


Credit investors are unconvinced about the ability of the world’s weakest lenders to weather a coronavirus economic slowdown, according to Bank for International Settlements.”

https://www.bloomberg.com/news/articles/2020-09-14/bank-credit-swaps-signal-concern-over-world-s-weakest-lenders


  • Facebook
  • Twitter
COVID-19 containment measures weighed heavily on economic activity in the second quarter of 2020, with unprecedented falls in real gross domestic product (GDP) in most G20 countries.

For the G20 area as a whole, GDP dropped by a record (minus) 6.9%, significantly larger than the (minus) 1.6% recorded in the first quarter of 2009 at the height of the financial crisis.”

http://www.oecd.org/sdd/na/g20-gdp-growth-second-quarter-2020-oecd.htm


The next subprime crisis could be in food:

  • Facebook
  • Twitter
Of all the many problems caused by Covid-19, three of the most visible have been food insecurity, the demise of small businesses and asset market volatility…

The problem is like a gigantic iceberg under the surface of financial markets, one that we can’t yet see but are nonetheless headed for…”

https://www.ft.com/content/ad2cf2eb-bdfc-4194-9c95-bdb3b9b2a641


  • Facebook
  • Twitter
The number of incidents of violence against journalists covering protests across the world has risen sharply, with police and security forces the main culprits, the United Nations cultural agency has said…

“…the spike came as part of “a wider upward trend in the use of unlawful force by police and security forces over the last five years”.”

https://www.aljazeera.com/news/2020/09/attacks-journalists-protests-risen-sharply-unesco-200914102013301.html


You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back tomorrow with a climate round-up.

Share This

Share this post with your friends!