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The coronavirus pandemic is costing the global economy $375 billion a month, and has seen some 500 million jobs lost since the crisis struck, the United Nations said in a policy brief on Wednesday

“UN Secretary-General António Guterres, while launching the policy brief, called on everyone to draw “hard lessons” from the pandemic, for which the world was not prepared.”

https://www.livemint.com/news/india/covid-about-500-mn-jobs-gone-global-economy-losing-375-bn-per-month-says-un-11602071643011.html


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Federal Reserve Board Chair Jerome Powell warned Tuesday that a failure to provide further support for the coronavirus-wracked economy could lead to a downward spiral of layoffs and economic decline

“Powell’s Tuesday speech is the latest appeal from the Fed chief to push lawmakers and the White House toward a long-sought deal on COVID-19 fiscal relief before Election Day.”

https://thehill.com/policy/finance/519797-powell-warns-of-downward-spiral-of-layoffs-recession-without-further


As Trump abandons stimulus talks, renters and landlords face a financial cliff.”

https://www.marketwatch.com/story/the-president-has-threatened-to-collapse-the-rental-market-as-trump-abandons-stimulus-talks-renters-and-landlords-face-a-financial-cliff-2020-10-06


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“Disaster” is one word being used to describe the potential fallout for the retail sector from on-again, off-again economic stimulus talks in Washington, D.C.

““A total retail disaster is unfolding before our eyes that is completely avoidable,” Andy Polk, a senior vice president at footwear industry trade group FDRA, told CNBC.”

https://www.cnbc.com/2020/10/07/stimulus-doubts-stoke-uncertainty-for-retail-as-holidays-loom-ahead.html


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U.S. anxiety rates surge in a year of pandemic, recession and violence:

More than a third of American adults reported symptoms of anxiety disorder in July — a rate more than four times what it was in the first half of 2019.”

https://www.cbsnews.com/video/us-anxiety-rates-surge-after-a-year-of-sickness-and-death/


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U.S. Senator Elizabeth Warren is asking large U.S. banks to disclose how they performed under a recent Federal Reserve exam of their finances during the coronavirus pandemic.

“In a letter sent to 14 large firms Wednesday, Warren asked each to provide its results from a confidential Fed test, arguing the central bank’s “limited transparency” on whether banks could weather a severe economic downturn is insufficient.”

https://uk.reuters.com/article/us-usa-senate-warren/senator-warren-asks-big-u-s-banks-for-details-on-pandemic-performance-idUKKBN26S2ZC


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More than 25m people in the euro area and the US are officially unemployed, according to figures published last week.

But economists say the true number of people who have lost work because of the pandemic is far higher, after taking account of those whose jobs are temporarily protected by state-subsidised furlough schemes, those who have dropped out of the labour force and those who cannot work as many hours a week as they would like.”

https://www.ft.com/content/ec3d88dc-0dc1-4f6e-adf7-37e8f4316a22


UK businesses took out 50% more loans in a three month span than they did in the entirety of 2019, new figures from the banking industry show.”

https://uk.finance.yahoo.com/news/coronavirus-uk-covid-19-uk-business-borrowing-smes-uk-finance-banks-stats-114108468.html


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Pubs and restaurants face a “cliff edge” in October with far more jobs likely to be cut than previously thought, MPs have been told

“”Ninety-one percent of our members said that the job support scheme wouldn’t be able to help them retain jobs because of the additional costs and restrictions that they were facing.””

https://www.bbc.co.uk/news/business-54435065


Major European economies are downgrading already dire economic forecasts on the back of a second wave of coronavirus infections sweeping through the continent, with over 6.3 million cases now reported in the region.”

https://www.cnbc.com/2020/10/07/coronavirus-in-europe-major-economies-predict-more-dire-growth-to-come.html


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German industrial output edged down in August… suggesting the recovery in Europe’s largest economy from the coronavirus shock is starting to lose steam.

Industrial output fell by 0.2% on the month… A Reuters poll had forecast an increase of 1.5%…”

https://uk.reuters.com/article/uk-germany-economy-industrialoutput/dip-in-german-industrial-output-casts-doubt-on-strength-of-recovery-idUKKBN26S0QD?il=0


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Cuts to interest rates to combat the economic effects of Covid-19 will not be as effective as flooding the system with cheap liquidity and pumping up asset prices through quantitative easing, the president of the European Central Bank has said.”

https://www.thetimes.co.uk/edition/business/european-central-bank-president-christine-lagarde-favours-liquidity-over-rate-cuts-3ntmbsj7l


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According to Robin Brooks, Chief Economist at the Institute of International Finance (IIF), the euro could become a deflation currency like the Japanese yen was before the Bank of Japan, under Kuroda’s leadership, launched unprecedented monetary stimulus in 2013.”

https://www.fxstreet.com/news/euro-is-in-danger-of-becoming-a-deflation-currency-iif-202010070255


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A leaked document last month regarding the cash flow of Evergrande, China’s second-largest developer by sales, has highlighted concerns of the liquidity flows of Chinese real estate developers.

“That has raised the pressure on property developers’ ability to repay their debts in the bond markets going into 2021, analysts warn.”

https://www.cnbc.com/2020/10/07/chinese-property-developers-rising-debt-and-junk-bonds.html


As China moves to tackle excessive borrowing in the real estate sector, it is walking a tightrope between providing cash-strapped local governments with revenues from land sales and keeping a lid on rising house prices.”

https://finance.yahoo.com/news/chinas-three-red-lines-strike-093000293.html


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The U.S. government is ramping up efforts to secure minerals critical to modern technology but whose supply is dominated by China—a stranglehold that miners warn could take years to break.

Last week President Trump signed an executive order declaring a national emergency and authorizing the use of the Defense Production Act to speed the development of mines.”

https://www.wsj.com/articles/u-s-steps-up-efforts-to-counter-chinas-dominance-of-minerals-key-to-electric-cars-phones-11601884801


More than 3,500 companies have filed lawsuits against the US government over its tariffs on China in recent weeks, demonstrating the extent of unhappiness among businesses over Donald Trump’s trade wars.”

https://www.ft.com/content/2b85124a-2196-42ec-96bb-4e9a3cb962dd


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The brewing trade fight with Vietnam is breaking across familiar lines in the U.S., with importers aghast and textile interests applauding.

Late last week, with President Trump suffering from COVID-19, his administration moved ahead with an investigation into Vietnam’s practices in the timber industry and whether or not the Asian nation undervalues its currency, giving domestic producers an advantage.”

https://wwd.com/business-news/government-trade/next-trade-war-u-s-fires-salvo-at-vietnam-donald-trump-timber-currency-1234623771/


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Indonesian police detained nearly 400 protesters on Wednesday, some armed with molotov cocktails and sharp weapons, on a second day of heated demonstrations over a controversial new jobs law in Southeast Asia’s largest economy.

“The protesters are demanding the government revokes an “omnibus” jobs creation law that has outraged unions, who say it lopsidedly favours businesses and will hurt workers and the environment.”

https://uk.reuters.com/article/us-indonesia-economy-protests/hundreds-held-in-indonesia-as-tempers-flare-on-second-day-of-protests-idUKKBN26S0JS


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Argentina on the brink again: Publicly supported by the International Monetary Fund, Argentina reached a debt-restructuring deal with private creditors in August to end its ninth default, and the third in just 18 years. The country has pushed debt amortisations to 2025 and beyond and drastically reduced interest payments.

“However, since then, prices of the newly issued government bonds have plummeted and country risk – as measured by the Emerging Markets Bond Index Plus – has reached 1,350 basis points, far from the 10% exit yield used by Argentina in its debt negotiations. What went wrong?”

https://www.omfif.org/2020/10/argentina-on-the-brink-again/


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Now demonstrators are pushing the administration of center-left President Carlos Alvarado to rule out altogether any deal with the Washington-based IMF over support for Costa Rica, whose budget woes have been exaggerated by the coronavirus pandemic.

The government on Wednesday said the protests had been infiltrated by criminal groups.”

https://www.devdiscourse.com/article/law-order/1243121-two-dozen-police-injured-in-costa-rica-in-imf-protests


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For the first time in a century, there are no rigs searching for oil in Venezuela. Wells that once tapped the world’s largest crude reserves are abandoned or left to flare toxic gases that cast an orange glow over depressed oil towns.

“Refineries that once processed oil for export are rusting hulks, leaking crude that blackens shorelines and coats the water in an oily sheen.”

https://www.nytimes.com/2020/10/07/world/americas/venezuela-oil-economy-maduro.html


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Venezuela plans to launch the biggest-denomination note in its history, but owing to delays in printing and hyperinflation it will be worth less than 18p by the time it enters circulation.

“The value of the bolivar has collapsed after years of economic mismanagement and even beggars on the streets of Caracas refuse to accept the lower-denomination notes.”

https://www.thetimes.co.uk/article/venezuela-s-biggest-banknote-will-be-worth-only-18p-due-to-printing-delays-and-hyperinflation-wmhnpkdz8


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South Africa’s biggest trade union group, COSATU, has urged members to stay away from work on Wednesday to protest job losses, wage curbs and corruption cases.

“COSATU, which says it has more than one million members, is normally an ally of the governing African National Congress (ANC) but has criticised the government’s handling of the COVID-19 pandemic.”

https://www.aljazeera.com/news/2020/10/7/south-africa-unions-protest-job-losses-wage-cuts


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Eastern Sudan has been rocked by widespread protests over recent days, with demonstrators disrupting the country’s largest port, threatening to cut off oil supplies and calling for independence from Khartoum.

“Operations in Port Sudan resumed on Wednesday after negotiations between striking workers and the Khartoum government…”

https://www.middleeasteye.net/news/peace-deal-east-sudan-sparks-calls-independence


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The near halt of Libya’s oil production and exportation amid the civil war could cause the country’s economic collapse, the head of the Tripoli-based Central Bank of Libya warned on Tuesday.

“Al-Saddiq al-Kabir told Tripoli’s parliament that shutdown of the country’s oil production and exportation since 2013 has cost Libya some $180 billion in losses, which he called “a bullet in the head” to the country’s economy.”

https://www.al-monitor.com/pulse/originals/2020/10/libya-oil-bank-tripoli-collapse-haftar.html


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Egypt: Crackdown intensifies as protests spread to rural poor.

“The rare participation of Egypt’s rural poor in recent protests shows “Egyptians have had enough,” human rights observers say. But authorities have consistently shown no hesitation in using a heavy hand to silence them.”

https://www.dw.com/en/egypt-crackdown-intensifies-as-protests-spread-to-rural-poor/a-55184682


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Hundreds of impoverished Lebanese people have recently tried to make the sea crossing from the northern port city of Tripoli to Cyprus in order to escape the country’s financial meltdown

“Most of them have been summarily “pushed back , expelled, or returned” by Cypriot coast guard forces “without giving them the opportunity to lodge asylum claims”, Human Rights Watch said in a statement.”

https://www.france24.com/en/20201008-lebanon-s-boat-people-desperate-tripoli-residents-attempt-sea-crossing-to-europe


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Iraqi protesters clashed Tuesday with security forces outside a holy Shia Muslim shrine in the southern city of Kerbala, causing injuries to several people.

“At least 50 people were wounded in the altercations, two Iraqi security officials said. They spoke on condition of anonymity in line with regulations.”

https://thearabweekly.com/violent-clashes-mar-shia-pilgrimage-iraq


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Clashes between Armenian and Azerbaijani forces have displaced half of the population of the breakaway Nagorno-Karabakh region, according to its rights ombudsman, as international mediators were set to hold their first meeting in Geneva.

“Russian president, Vladimir Putin, urged an end to a “huge tragedy” in an interview with state-run television on Wednesday…”

https://www.theguardian.com/world/2020/oct/08/half-of-nagorno-karabakh-population-displaced-by-armenia-and-azerbaijan-clashes


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Rival groups in Kyrgyzstan were jostling for power on Wednesday night after the prime minister resigned and the president went into hiding in the face of widespread demonstrations against alleged election rigging.

“Law and order was close to collapse as the Central Asian country appeared to be embroiled in its third revolution in 15 years.”

https://www.telegraph.co.uk/news/2020/10/07/power-vacuum-kyrgyzstan-government-falls-apart-protests/


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The economic consequences of the coronavirus pandemic will change the profile of global poverty by creating millions of “new poor” who are relatively well-educated in urban areas of middle-income countries, the World Bank has warned.

“Overall, the pandemic will push between 88m and 115m people into extreme poverty this year, which the bank defines as living on less than $1.90 a day, according to a report it published on Wednesday.”

https://www.ft.com/content/2a41fa8b-e5d1-4102-b14f-7ec5820a5d7d


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Despite the global economic shock, the world’s 500 richest people are a combined $813 billion richer now than they were at the beginning of the year, according to the Bloomberg Billionaires Index.

“Total billionaire wealth surged to a fresh peak of $10.2 trillion in July, up from $8.9 trillion at the end of 2017, according to the report findings.”

https://fortune.com/2020/10/07/billionaires-richer-2020-jeff-bezos/


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Oil companies are facing a perfect storm of low prices, low demand and long-term questions about the viability of their product. Those realities will inevitably push up the cost of capital.

“Two of the largest oil majors, Chevron and Exxon, have between them lost $9.4 billion in the second quarter alone.”

https://oilprice.com/Energy/Oil-Prices/Problems-Are-Piling-Up-For-Oil-Majors.html


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The slump in demand for crude during the coronavirus pandemic has forced oil companies to contemplate the possibility that the fossil fuel market has peaked

But Saudi Aramco plans to boost its production capacity so it can pump as much of Saudi Arabia’s vast oil reserves when demand picks up…”

https://uk.reuters.com/article/saudi-aramco-strategy-insight-int/sole-survivor-saudi-aramco-doubles-down-on-oil-to-outlast-rivals-idUSKBN26S17V


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The World’s Biggest Oil Trader Wants to Buy Your Used Car:

Vitol Group, which traded more than 8 million barrels of oil and petroleum products a day in 2019, is getting into the used-car business… The used-car startup is the latest example of how the world’s biggest energy traders are trying to diversify…”

https://www.bloomberg.com/news/articles/2020-10-06/the-world-s-biggest-oil-trader-wants-to-buy-your-used-car


Measures taken by Transocean [the world’s largest owner of deep-water oil rigs] to stave off a bankruptcy filing could be exactly what ends up sending the offshore drilling company into Chapter 11…”

https://www.worldoil.com/news/2020/10/6/transocean-s-efforts-to-avoid-bankruptcy-could-lead-to-a-default


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Huge aid packages saved airlines at a time when air travel came to a near standstill because of the coronavirus, but the worst is not over, analysts said.

“Travel data company Cirium found that 43 commercial airlines have failed — completely ceased or suspended operations — in 2020 so far, compared to 46 in all of 2019 and 56 throughout 2018.”

https://www.cnbc.com/2020/10/08/over-40-airlines-have-failed-in-2020-so-far-and-more-are-set-to-come.html


World merchandise trade is expected to fall by 9.2 percent in 2020, followed by a 7.2-percent rise in 2021, the World Trade Organization said on Tuesday in its revised trade forecast.”

https://www.shine.cn/biz/economy/2010077365/


We [at Markit] project that world real GDP will decline by 4.8% in 2020, a far worse outcome than the 1.7% contraction in 2009 at the height of the global financial crisis.

https://seekingalpha.com/article/4377816-global-recession-risks


Top U.S. and European central bankers on Tuesday called for renewed government spending to support families and businesses as the battle against the coronavirus-triggered recession enters a newly critical phase.”

https://uk.reuters.com/article/uk-usa-fed-cenbanks/central-bankers-call-for-fiscal-aid-at-critical-point-in-pandemic-battle-idUKKBN26R3AS


Fed money printing
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“…investors are enormously confident in the willingness of systemically important central banks – namely, the US Federal Reserve and the European Central Bank – to inject liquidity at the first sign of serious market stress, regardless of how much further they have to venture into the domain of experimental unconventional policy.

“Yet by building an ever-wider wedge between market valuations and economic fundamentals, central banks may be jeopardising their own credibility, amplifying wealth inequalities and increasing the risk to future financial stability.”

https://www.theguardian.com/business/2020/oct/07/central-bank-covid-donald-trump-stimulus-package


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Central banks became net sellers of gold in August for the first time in a year and a half, in the latest indication that demand for the metal is slowing following a record-setting rally.

The latest data reflect the pullback of some major buyers as countries free up resources to deal with the coronavirus crisis.

https://www.ft.com/content/09b0a30f-2997-4e8a-92bf-f9eb61952b92


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The market is facing (at once and together): possible deflation, potential inflation, a second leg of the recession, delayed stagflation, a dollar decline, staggering business bankruptcies, a continued pandemic, a contested election, an unruly transfer of power, and a sickened authoritarian President trying to entrench his rule.”

https://www.forbes.com/sites/jamesberman/2020/10/07/the-antidote-to-peak-uncertainty/#1e5cb6417f84


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

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