“A top Federal Reserve official said Monday that the central bank would use all available tools to ensure a strong recovery from the pandemic-induced shock and that he expected more support would be needed…
“Richard Clarida, the Fed’s vice chairman, said officials discussed at their rate-setting committee meeting earlier this month changes they could make to the asset-purchase program, in which the central bank has been buying $120 billion a month in Treasurys and mortgage bonds…
““We’ll make adjustments as needed,” Mr. Clarida said. “We’re buying a lot of Treasuries. These are big programs.””
“Big city rents [UK] are dropping by up to 45 per cent as swathes of tenants no longer have to live near their workplaces.
“A Zoopla report last week said average rents in London are now 5.2 per cent lower than they were a year ago – while those in Birmingham, Manchester and Edinburgh are also dropping.”
https://www.dailymail.co.uk/news/article-8952987/Rents-big-cities-fall-45-Britons-work-home.html
“One million UK freelancers have been pushed into debt since the pandemic hit, according to a new report, ‘The Cost of Covid: How the pandemic is affecting the self-employed’, released today by IPSE (the Association of Independent Professionals and the Self-Employed) and digital bank, Starling.”
“Eurozone economy: the struggle to stay afloat until a vaccine arrives:
“With Covid-19 infection rates in Italy and many other countries soaring well above those reported during the first wave in the spring, the big worry for European policymakers is that the restrictions on struggling businesses… Ladroni may stretch them to breaking point and put strain on the region’s banking system.”
https://www.ft.com/content/27daf526-197f-4b48-94dc-236e49717aee
“The fallout from the coronavirus pandemic on Europe’s financial institutions will become more apparent in the coming months, according to a senior European banking official, and there could be one or two casualties in the sector.”
https://www.cnbc.com/2020/11/17/european-banks-pandemics-impact-wont-be-clear-until-2021.html
“The European Central Bank appears serious about a digital euro.
“Barely a month after the central bank issued a major report on the topic, and opened a public consultation, President Christine Lagarde said “her hunch” is that the euro zone could have its own electronic currency within two to four years.”
“Portion sizes shrink in aging Japan as ‘real’ food prices rise: Food prices in Japan are increasing more than consumers realize.
“The retail price of food products increased 4% over the past eight years but when the net weight is taken into account, the change is actually as high as 11%.”
“China state enterprises facing debt problems: Chinese banks and fund managers dumped their holdings of riskier bonds last week after a series of credit shocks involving state-owned enterprises (SOEs) jolted China’s corporate bond market.
“Below is a list of SOEs whose debt problems in recent weeks have raised concerns among investors:”
“Tsinghua Unigroup, a major government-backed player in China’s technology race, has defaulted on a 1.3-billion-yuan ($197.96 million) bond, three sources said, as several high-profile delinquencies by state firms rattled the country’s bond market.”
“Debt levels of emerging market governments ballooned to record highs in 2020 and are expected to continue rising next year, JPMorgan said in a note on Monday, as policymakers battle to restart economies battered by the coronavirus pandemic.
“General government debt across 55 developing nations jumped to an all-time high of 59.0% of gross domestic product in 2020…”
“Zambia’s debt crisis casts a long, global shadow:
“Every debt crisis is like a snowflake, unique and complex. But of the ones we have seen so far in 2020, the Zambian debacle has the potential to become a template for how many of the rest — and there will be more — will shake out.”
https://www.ft.com/content/35c58b5f-f890-4390-967a-28c0a0a1fb50
“Zambia’s former commerce minister Bob Sichinga has warned that if government does not treat the debt crisis seriously, the economy will collapse.”
“Peronist senators in Argentina demand concessions from IMF:
“Divisions in Argentina’s ruling leftist coalition were laid bare after a group of senators sent a letter to the IMF that threatened to sour fresh negotiations between the government and the multilateral lender over the repayment of a $44bn loan.”
https://www.ft.com/content/1a154e62-1dc5-47bf-b307-5060b353ee39
“Bolivia aims to rein in its fiscal deficit with an economic austerity plan instead of fully relying on foreign debt, finance minister Marcelo Montenegro said.
“The country’s new socialist government will closely analyze the international bond market to see if there are more attractive opportunities to borrow more in a world of low interest rates…”
“Peru’s legislature on Monday selected the country’s third president in a week, seeking to stanch growing street protests over lawmakers’ decision to remove a popular president from office last week.
“Addressing the nation, the country’s newest leader, Francisco Sagasti promised to help the country move away from bitterness and “toward a moment of happiness, of hope.””
https://www.nytimes.com/2020/11/16/world/americas/Peru-president-Francisco-Sagasti.html
“Venezuelan central bank officials have summoned executives from a handful of local financial firms to discuss plans to create a clearing and settlement system in U.S. dollars starting next year, according to five people with knowledge of the matter…
“Venezuelans now use greenbacks to pay for everything from candy bars to shoes, often relying on money transfer services like Zelle due to a shortage of cash.”
“An Olympic gold medal winner has turned to delivering food to support his family… Venezuela’s Ruben Limardo Gascon won gold in fencing at the 2012 London Olympics, becoming a national hero.
“But with little chance for sponsorship amid the economic downturn caused by the pandemic, he is supporting his family by delivering food for Uber Eats in Lodz, Poland…”
“Gripped by the lingering political turmoil, the Belarusian economy is sinking despite a $1.5bn loan lifeline thrown to it by the Kremlin to help the country’s self-appointed leader Alexander Lukashenko…
“The economy has been slowing and the population have withdrawn some $1.5bn of cash from ATMs, largely in dollars, in anticipation of yet another recession and currency collapse.”
https://www.intellinews.com/just-how-close-is-belarus-to-an-economic-crisis-196688/
“This year, Russia’s new confirmed oil and gas condensate reserves are expected to be well below the country’s output.
“Moreover, the development of many new oilfields won’t be profitable if oil prices remain below $50 per barrel, as they are difficult to reach and require expensive supporting infrastructure.”
https://realnoevremya.com/articles/4948-russia-may-face-difficulties-with-replacing-oil-reserves
“Saudi Aramco has revealed that it has hired a group of banks in a bid to raise cash amid a slump in oil price…
“Aramco needs to raise debt after slumping oil prices caused profit to fall by 45% in Q3, debt % of equity now 21.8%, above its target range of 5% to 15%.”
https://uk.news.yahoo.com/aramco-hires-banks-raise-cash-coronavirus-hit-oil-prices-085053090.html
“Wheat and fuel shortages overwhelm Syria: The country’s economic collapse has been aggravated by the pandemic, Lebanese banking crisis and international isolation…
“A minor oil producer and once a wheat exporter, the government is so cash-strapped that last month it reduced subsidies on the one staple Syrians could just about afford — bread…”
https://www.ft.com/content/f3ccc3a7-c697-412a-9b99-18944de5c108
“A financial market meltdown in March highlighted weaknesses that still pose a threat to global financial stability, indicating the need for reform, a global body that monitors financial risks said on Monday.
“…the Financial Stability Board… noted, “the financial system remains vulnerable to another liquidity strain, as the underlying structures and mechanisms that gave rise to the turmoil are still in place.””
https://www.nytimes.com/2020/11/16/business/economy/financial-stability-board-report.html
“The financial system will be left in a fragile state even after the world emerges from the pandemic, according to the investment chief of one of the world’s most powerful bond fund managers.
“Dan Ivascyn of Pimco warned that the world will have to live with the consequences of the huge extra debts taken on by companies to see them through the crisis and by governments to bail out their economies.”
https://www.ft.com/content/20edd27c-2648-4322-9c78-0063cc967f04
“Exchange rates have been stable in the Covid crisis – are we heading for a storm?
“…Nobody knows for sure what might be keeping currency movements in check. Possible explanations include common shocks, generous Fed provision of dollar swap lines, and massive government fiscal responses around the world. But the most plausible reason is the paralysis of conventional monetary policy…
“…the current stasis will not last forever.”
https://www.theguardian.com/business/2020/nov/16/exchange-rates-covid-crisis-pandemic-us-election
“Was hyperglobalisation an anomaly? [Yes, a one-time deal fuelled by a peaking throughput of energy, primarily from fossil fuels].
“Slowbalisation is a term Adjiedj Bakas, a Dutch trendwatcher, coined in 2015 to describe the backlash against global trade. Since then, The Economist has used it to characterise the sluggish growth in trade flows that we’ve witnessed in recent years.”
https://www.ft.com/content/a89f5911-5cba-4d62-8746-5213303a92ec
“World poverty rising as rich nations call in debt amid Covid, warns Gordon Brown:
“Child mortality crisis is looming as nations struggle to make payments to west and China, says former prime minister.”
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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