The global economy could be facing a make-or-break moment in the Covid-19 pandemic as governments’ ability to cover the mounting costs nears its limits, the chief of the OECD warned.“
“Angel Gurria, who spent 14 years as the head of the Paris-based body, said while governments were right to open the spending taps this year to counter the worst recession in living memory, many are close to running out of fiscal firepower.”
The Virus Is Surging. Growth Is Slowing. And Millions of Americans Are About to Lose Jobless Benefits.“
“The Cares Act was a gamble that the coronavirus would be eliminated quickly. That was a bad bet, and Americans are set to pay the price for it once again.”
U.S. Treasury Secretary Steven Mnuchin said on Thursday that key pandemic lending programs at the Federal Reserve would expire on Dec. 31, putting the outgoing Trump administration at odds with the central bank and potentially adding stress to the economy as President-elect Joe Biden organizes his administration.”“
Eight months into the pandemic, US clothing stores, restaurants, gyms and other businesses find themselves in a $52 billion hole. That’s the total amount of retail rent that’s been missed since April…“
““You’re going to have big bubbles that are going to be hitting next year or even in the fourth quarter,” said Andy Graiser, co-president of A&G Real Estate Partners, an advisory firm. “I’m not sure if they are going to be able to make those payments in addition to their existing rent.””
Two US banks failed in October, the first to collapse since the start of the coronavirus pandemic.“
“Banking experts say they won’t be the last. At least 50 of the country’s more than 5,000 banks are considered troubled, according to Bauer Financial…”
[non-bank lenders may be the ones to watch in the first instance though, as tighter regulations since the Global Financial Crisis have tended to push risk into the shadow lending system].
Lines are continuing to grow at food banks across the US as the financial devastation caused by the coronavirus pandemic is laid bare. “
“Millions of Americans are currently going hungry, relying on volunteers and non-profit organizations to stay fed as Thanksgiving approaches.”
Rishi Sunak has warned there may need to be cuts as the UK’s debt reached a record high of more than £2 trillion. Public sector debt has reached £2.08 trillion at the end of October…“
“It is thought he will cap pay rises in the public sector to at or below inflation… teachers, police, members of the armed forces as well as NHS managers will all be affected.”
“The UK economy contracted more than twice as much as that of any other G7 nation in the first nine months of the year, a report has confirmed.”
Almost three quarters of UK pubs and restaurants expect to shut permanently next year following damaging coronavirus restrictions, an industry poll indicated Thursday.“
“The British Beer and Pub Association, the British Institute of Innkeeping and UK Hospitality said in a statement that 72 percent of surveyed businesses “expect to become unviable and close in 2021″.”
UK Workers left with almost no money who are relying on handouts due to the pandemic have begged for help from the Government.“
“Around three million people are facing financial crisis because they cannot access government help.”
Thyssenkrupp, the ailing German steel and materials group, plunged to a full-year loss of €5.5bn and said it would cut 7,400 more jobs, as…“
“…the pandemic increased pressure on the former conglomerate to speed up the sale of underperforming businesses.”
“IBM is planning to cut 8,000 staff in Europe, including up to 2,000 in the UK and Ireland, according to a report by Channel Partner Insight (CPI).”
Russia’s gross domestic product fell 4.7% year-on-year in October, after a 3% decline in September, the economy ministry said on Friday.“
“Economic contraction was mostly driven by a drop in output in the manufacturing and agriculture sectors, the ministry said…”
Arab Gulf oil producers are losing billions of U.S. dollars from oil revenues this year due to the pandemic that crippled oil demand and oil prices.“
“Because of predominantly oil-dependent government incomes, budget deficits across the region are soaring.”
“The pricing of Aramco’s $8 billion jumbo bonds this week has made clear that markets look at the oil giant as a proxy for Saudi Arabia, investors say, a change from last year’s inaugural bond issue that valued its risk as lower than the government’s.”
“It’s economic madness but China Borrows at Negative Rates for the First Time.
“Superlow interest rates in Europe helped China to sell its first negative-yielding debt, as it raised about $4.7 billion in a three-part deal in euros.”
“China’s market regulator expanded its investigation into bond sales for a state-backed coal miner that unexpectedly defaulted on payments last week, dragging in a number of banks, rating and accounting firms.”
Why China could snarl global debt relief:“
“A new common framework for restructuring looks great, but there are complications.”
“Japan’s core consumer prices fell in October at their fastest annual pace in nearly a decade as the boost from last year’s sales tax hike petered out, heightening fears of a return to deflation for an economy still dealing with COVID-19.”
“Japan’s manufacturing decline sped up in November as output and orders sagged, a business survey showed on Friday, underscoring the fragile nature of the economic recovery from the COVID-19 crisis.”
African countries face another debt crisis and will need more long-term help than the latest G20 debt plan offers them to ward off trouble ahead and keep much-needed investments coming in…“
“Around 40% of sub-Saharan African countries were in or at risk of debt distress even before this year, while Zambia became the continent’s first pandemic-era default last Friday.”
Surging debt during the pandemic is creating dangers for investors and developed countries:“
…one of the big areas of concern is in developed markets, which are battling slow growth and rising debt at the same time.”
People are suffering’: “G20 to call on private lenders to suspend debt repayments.
At this weekend’s meeting in Riyadh, leaders will urge action to free up resources to help stricken developing countries combat Covid-19.”
“Some advocates have continued to promote the G20 as the natural forum to discuss major issues confronting the world.
“But the G20 faces three major challenges: legitimacy, effectiveness and membership.”
“Great Reset or grating global conspiracy theory? Either way, don’t dismiss genuine anxiety:
“…Earlier this month, [Australian] Senator Pauline Hanson moved a motion to reject the World Economic Forum’s “Great Reset”. The senator asked Parliament to “note that adopting the policies would devastate the economic wellbeing and individual freedoms of Australians” and that the Australian government should boycott all World Economic Forum events in protest over The Great Reset agenda.
“The motion referred to a theory that the global elite are planning to impose a new world order, using the COVID-19 pandemic as cover.”
You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.
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