The pandemic has worsened existing economic hardships for young [American] adults – and taken a serious toll on mental health.“
“…Like many young people, David Little has been hit hard by the economic collapse in the wake of Covid-19. He’s uncertain of what will happen when his unemployment benefits run out at the end of this year, no longer has health insurance after turning 26 this year, and has already racked up significant credit card debt to cover bills over the past few months.
“Before the pandemic, younger people in America were already making substantially less money than older generations, even compared with when those older people were young. In 1989, baby boomers controlled 21% of the nation’s wealth; millennials controlled just 5% of the nation’s wealth in 2019.
“And coronavirus has made life worse.”
“If at first you don’t succeed you can try and try. But eventually, sometimes, failure is what follows…
“The hoped-for mutual understanding, the nudge or wink to pursue compromise, did not come.
“The only agreement [on Brexit negotiations] was on when they might call a halt. For the first time in a world of highly moveable deadlines, they announced that a final decision must be taken by the end of the weekend.”
Tesco is stockpiling food and its customers will face food shortages and drastic price increases in the ‘worst-case scenario’ of a No Deal Brexit, it was revealed today.“
“Britain’s biggest retailer is stockpiling long-life food as Boris Johnson struggles to find a way through the deadlock in trade negotiations and has again warned against panic buying.”
Britain’s economic recovery from the first wave of the Covid-19 had almost come to a standstill as fresh restrictions affecting the hospitality sector were imposed in the autumn, according to the latest official data.“
“Figures from the Office for National Statistics showed that national output – or gross domestic product – rose by 0.4% in October… remained almost 8% below its pre-crisis level.”
Paris was quick to provide cheap loans to businesses but is now assessing if more radical steps will be needed:“
“…job losses are now accelerating… “It’s the calm before the storm,” says Philippe Martin, chairman of the French Council of Economic Analysis.
““Eventually we’ll have to see business fail, and we want some to fail as that’s normal and healthy for an economy, but the question is when and how to manage it.””
Greece Is Setting Itself Up For Another Financial Crisis:“
“The Greek economy shrunk by a record 14 percent in the second quarter of 2020 while at the same time government efforts to ‘’cure’’ the economy have set the country on the road to cross the 200 percent debt-to-GDP ratio as the IMF forecasts. In the meantime, government budget deficits have reached new heights (around 7 percent).”
In-work poverty increased over the last decade in most European countries, with around 12% of workers at risk of poverty, according to the latest report by the European Trade Union Confederation (ETUC).“
“The scars left by financial crisis were deep and are still visible.
“The ‘Benchmarking Working Europe 2020’ report, to be published on Thursday… concluded that the “in-work poverty” increased in 16 member states between 2010 and 2019 [ie pre-pandemic].”
European companies hit by the coronavirus crisis are increasingly turning to a complex financial tool to pay suppliers, raising investor concerns around “hidden” debt.“
“Supply chain financing, by which companies can get cash from banks and funds to pay their suppliers without using working capital, has likely hit a record high in 2020, data shows.”
Australia has sold short term treasury bills at a negative yield for the first time in its history, joining Japan and a raft of European nations that are being paid to borrow money from investors.“
“Investors snapped up A$1.5bn ($1.1bn) of three-month notes on Thursday at an average yield of 0.01 per cent, with some buyers at the auction receiving a yield of minus 0.1 per cent.”
Japan is likely to sell a record amount of new government bonds exceeding $960 billion in the current fiscal year due to plunging tax revenues, the Nikkei newspaper said on Wednesday, underscoring the heavy toll the coronavirus pandemic took on the economy.“
“The huge debt will add strains to Japan’s already tattered finances…”
South Korea’s household debt growth hit a record monthly high last month as households raised credit loan amid an economic fallout from the COVID-19 resurgence, central bank data showed Wednesday.“
“Debt, owed by households to banks, amounted to 982.1 trillion won (907.7 billion U.S. dollars) as of end-November, up 13.6 trillion won (12.6 billion U.S. dollars) from a month earlier, according to the Bank of Korea (BOK).”
China’s household debt ballooned in the first half of the year, rising by about $380 billion, according to new Bank for International Settlements data.“
“That increase was almost four times as large as the second-place U.S. And it compounds one of China’s biggest economic vulnerabilities.”
Why China’s Debt Defaults Are More Alarming This Time:“
“Chinese companies are facing a reality check after years of ramping up debt. A crackdown on unregulated lending — so-called shadow banking — and tighter rules on asset management made it harder for some to borrow fresh funds to repay existing debt, leading to a record number of bond defaults in 2018 and 2019.”
Emerging-market central banks cautiously revisited interest rate cuts last month following a hiatus in October, resuming an easing cycle that started in 2019 and had exceeded the cuts during the 2008 financial crisis and the 2010 euro crisis.“
“Central banks across a group of 37 developing economies delivered two net interest rate cuts in November after standing pat in October.”
By any measure, Thailand’s dependence on foreign markets and visitors has made it especially vulnerable to the effects of the coronavirus pandemic… “
“The nation is hoping to pump stimulus into the economy while maintaining a stable currency. Can it thread the needle?”
Bank Indonesia (BI) is urging commercial banks to cut lending rates and accelerate credit disbursements to lift the economy out of recession as loan channeling shrank for the first time in at least two decades due to weak demand and the banks’ risk aversion. “
“BI Assistant Governor Aida S. Budiman said on Monday that banks should lower lending rates further…”
Brazil’s central bank signaled it may be unable to fulfill its pledge to keep interest rates at a record low for long due to rising inflation expectations…“
“…conditions for keeping borrowing costs low may soon not be met…”
Zambian authorities formally requested a financing arrangement from the International Monetary Fund (IMF), the Fund said on Tuesday, to help the southern African copper producer navigate a debt crisis.“
“Zambia became Africa’s first pandemic-era sovereign default last month after it failed to pay a $42.5 million coupon on one of its Eurobonds.”
Ethiopia faces a rising debt to service, while major companies are pulling out of plans to locate there. Meanwhile the war rages on…“
“… for two years Ethiopia has been pummelled by challenges: ethnic clashes, floods, locust swarms and coronavirus lockdowns.”
At least seven people have been killed in ongoing violent protests since Sunday in northern Iraq, where government workers are demanding their salaries be paid as Covid-19 plunges the country into economic turmoil.“
“Six protesters were killed after local security forces opened fire to disperse crowds in various parts of Sulaymaniyah province.”
Pandemic creates a ‘learning crisis’ in parallel to health emergency:“
“The long-term effects of children staying off school are disastrous for poorer countries’ citizens and future… up to 1.7bn students were out of school this year and 600m have not yet returned.”
It will take two to three years for global output to return to pre-pandemic levels [we were already entering a global downturn pre-pandemic] as many developing nations slowly climb out the coronavirus-induced slump with the help of vaccines, World Bank President David Malpass said.“
“The pandemic has caused the global economy to collapse [not yet, it hasn’t] this year, throwing nearly 100 million people into extreme poverty in many poor countries.”
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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