Daily updates on climate change and the global economy.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

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Stimulus addiction may be driving the global economy towards a cliff edge: Increasingly, it feels like we are heading over a cliff yet dare not turn back because of the demons pursuing us.

This is the stuff of nightmares but also an apt metaphor for the fate that could await a global economy being driven towards disaster by an addiction to monetary and fiscal stimulus.”

https://www.scmp.com/comment/opinion/article/3114409/stimulus-addiction-may-be-driving-global-economy-towards-cliff-edge


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Investors and analysts surveying the damage wrought by the pandemic have warned that it has exacerbated some of the most worrying trends in corporate debt markets and left balance sheets in a far riskier state.

“US companies have borrowed a record $2.5tn in the bond market in 2020… At the same time, companies’ ability to pay for the increase in debt has declined…”

https://www.ft.com/content/7fa7e230-5a8f-4a65-b8b7-ecd603a2a3d1


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Pain, despair and poverty reach fever pitch for unemployed workers [US].”

““Having to stand on a freeway off ramp with a sign that says you’re hungry — it’s a new experience for me,” Randy Chase said.”

https://www.cnbc.com/2020/12/19/how-unemployment-pushes-workers-to-edge-amid-coronavirus-pandemic.html


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The $900bn fiscal stimulus agreement reached on Sunday will deliver a much-needed jolt to the US recovery after months of uncertainty…

But the deal is no panacea for the world’s largest economy: it has come too late to avoid a big slowdown in the labour market and a reduction in consumer spending — and may be insufficient to address longer-term damage from the pandemic.”

https://www.ft.com/content/844ed633-ed20-471b-8809-7f049e9e8ecb


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Food banks a lifeline for New Yorkers hit by coronavirus crisis:

When the coronavirus pandemic hit, 45 year old Marisol Gonzales, an immigrant from Salvador living in New York City, lost her job as a massage therapist…”

https://www.euronews.com/2020/12/20/food-banks-a-lifeline-for-new-yorkers-hit-by-coronavirus-crisis


I never thought it would be like this’. For many unemployed Carolinians, looking for work is a full-time job: A recent report from financial planning site LendEDU found 63% of Americans will take on record credit card debt this holiday season.”

https://www.wcnc.com/article/money/unemployed-north-carolina-full-time-job/275-afcb3726-f1b9-458f-aef1-fd0fcae48b33


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The sharp fall in share prices in the City told its own story. Hopes that the arrival of 2021 would see a bounce in the UK economy after a year to forget have been dashed.

“The new mutation of the virus that causes Covid-19 will put strains on the NHS and has disrupted Christmas plans for millions. It will also delay recovery from the biggest peacetime collapse in growth in more than 300 years.”

https://www.theguardian.com/business/2020/dec/21/new-covid-strain-means-short-term-prospects-for-uk-economy-are-bleak


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Airlines cancelled scores of flights on Monday as a growing list of countries banned travel from the UK, compounding the crisis facing the aviation industry following a year of unprecedented disruption.

“Germany, France, Spain, Italy, Hong Kong and India are among the countries to have blocked people arriving from the UK… Shares in major airlines were among the worst hit during a stock market sell-off…”

https://www.ft.com/content/c0301c00-fdae-42bb-8594-2c800831beb9


The yield on two-year British government bonds fell to a record low on Monday after the government imposed tougher coronavirus restrictions, raising fresh fears about the outlook for Britain’s economy.”

https://www.reuters.com/article/uk-britain-bonds/uk-2-year-gilt-yield-hits-record-low-after-new-covid-crackdown-idUKKBN28V13X


Over 800,000 private renters in England and Wales are in arrears as lockdown measures severely impact their ability to work, landlords have warned.”

https://www.independent.co.uk/independentpremium/uk-news/debt-crisis-rental-market-property-landlords-b1777231.html


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Mr Bogan was the target of fraudsters seeking to exploit weaknesses in the UK government’s £43.5bn coronavirus Bounce Back Loans Scheme. Launched by chancellor Rishi Sunak in May…

“The Financial Times has spoken to more than a dozen senior bankers, fraud experts and people involved in the creation and running of the programme.

“In the words of one, “the scheme was being abused and defrauded on an industrial scale”.”

https://www.ft.com/content/41d5fe0a-7b46-4dd7-96e3-710977dff81c


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Cynical fraudsters [UK] are seeking to cash in on the growing panic among those looking for work by flooding the recruitment market with fake job advertisements.

Their aim is to lure job-seekers into parting with hundreds, or even thousands, of pounds for bogus courses, dud criminal record checks and a host of other fraudulent services.”

https://www.thisismoney.co.uk/money/beatthescammers/article-9006121/The-great-fake-job-scam-probe-exposes-callous-fraud.html


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A top business chief last night sounded the alarm over Britain’s mounting corporate debt pile – just as the Government extends emergency bank loans for struggling firms.

Xavier Rolet, former boss of the London Stock Exchange, warned that companies in the UK and other nations are now ‘so awash with debt that central banks simply can’t control it’.”

https://www.thisismoney.co.uk/money/markets/article-9070497/Debt-control-British-firms-says-Xavier-Rolet.html


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Japan’s cabinet approved on Monday a record $1.03 trillion budget draft for the next fiscal year starting in April 2021, the Ministry of Finance said, as the coronavirus and stimulus spending puts pressure on already dire public finances.”

https://uk.reuters.com/article/us-japan-economy-budget/japans-record-1-trln-budget-highlights-covid-19-challenge-to-growth-debt-idUKKBN28V08E

The number of bankruptcies in Japan’s restaurant industry will likely hit an all-time high in 2020 as many establishments struggle to restore their cash flow amid the ongoing coronavirus pandemic, the results of a recent survey showed.”

https://www.japantimes.co.jp/news/2020/12/12/business/bankruptcies-japan-restaurants-coronavirus/


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President-elect Joe Biden has made no secret that one of his earliest foreign policy objectives will be for the U.S. to rejoin the landmark Iran nuclear deal that the Trump administration has spent four years disparaging and gutting.

Restoring the agreement, however, will be among his administration’s toughest foreign policy challenges.”

https://www.latimes.com/politics/story/2020-12-21/bidens-plans-to-restore-iran-nuclear-deal-perhaps-with-leverage-provided-by-trump

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Iran is primarily an oil-exporting country. Technically, the medical system is exempted from US sanctions, better known as the “maximum pressure campaign.”

However, by targeting the country’s financial and energy sectors, the US sanctions have set off an economic depression that could be worse than any in Iran’s modern history [low oil prices also not helping].

https://www.thenation.com/article/world/iran-coronavirus-us-sanctions/


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Hundreds of angry Iraqis protested Monday in several cities against a currency devaluation that has slashed their purchasing power amid a pandemic-fuelled economic crisis.

“The Central Bank of Iraq (CBI) at the weekend devalued the currency by over a fifth against the US dollar, officially re-pegging the dinar at a bank rate of 1,460 to the greenback.”

https://thearabweekly.com/protests-iraq-anger-simmers-over-currency-devaluation


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Sudanese protesters demand ‘justice’ two years after uprising: Thousands in several cities denounce Sudan’s dire economic situation, with some chanting for the ‘fall of the regime’

The [transitional] government has been struggling with a huge budget deficit and widespread shortages of essential goods, including fuel, bread and medicine.”

https://www.aljazeera.com/news/2020/12/19/sudanese-protesters-demand-justice-two-years-after-uprising


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Santa Claus walked the streets of the outskirts of Venezuela’s capital Caracas this weekend, giving children gifts ranging from bread to clothes at a time when the country is struggling with the coronavirus pandemic and an economic collapse.

“Venezuelans are once again celebrating Christmas in crisis as the OPEC nation completes a sixth year of recession and a third of hyperinflation…”

https://www.reuters.com/article/us-christmas-season-venezuela-santa/in-pandemic-and-recession-santa-claus-gifts-bread-and-clothes-to-poor-venezuelan-kids-idUSKBN28U0KB


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A string of crises has engulfed Peru, Latin America’s sixth-largest economy, since the start of 2020. If the marked impact of the COVID-19 pandemic on Peru were not enough, it now finds itself rocked by a succession crisis.

“By mid-November 2020 the Andean country had three presidents in a week after congress removed Martín Vizcarra from office. This incited considerable civil unrest and left the country leaderless at a crucial juncture.”

https://oilprice.com/Energy/Crude-Oil/Perus-Oil-Crisis-Is-Worsening.html


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Latin America reports worst economic crisis in over a century:

The pandemic is the main cause of an overall seven percent drop, a figure representing mass job losses and businesses shutting down.”

[Video]

https://news.yahoo.com/latin-america-reports-worst-economic-101349092.html


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Mexico City mayor promises financial support as 3-week lockdown begins: The closure of nonessential businesses seen as ‘the final blow’ for many

The vast informal economy workforce, among whom are street vendors who would normally see their sales increase in the days before Christmas, will also take a large financial hit…”

https://mexiconewsdaily.com/news/coronavirus/mexico-city-mayor-promises-financial-support/


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Global institutions, creditors and lobby groups are scrambling to come up with ways of tackling what many fear will be a wave of sovereign debt crises in emerging economies in the coming year

Not only the poorest countries are at risk.

“Debt burdens among the 30 biggest emerging economies rose by 30 percentage points of gross domestic product between January and September to almost 250 per cent according to the Institute of International Finance.”

https://www.ft.com/content/de43248e-e8eb-4381-9d2f-a539d1f1662c


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Lebanon’s national airline will stop accepting payment in US dollars from deposits in local banks, its chairman said, intensifying questions about the real value of $87bn of deposits in Lebanon’s stricken banking sector.

““We will start selling our tickets in fresh dollars,” said Mohamad el-Hout, Middle East Airlines chairman, distinguishing real dollars transferred from abroad and free of severe banking restrictions from the assets denominated in US dollars trapped in Lebanon’s moribund banks.”

https://www.ft.com/content/0028f163-af2e-4693-85f5-4ae181232693


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This year, Christmas cheer will be missing from the hearts of many Zimbabweans who will have to make do with reminiscing about previous festive seasons instead.

Their country is in the grip of an economic crisis as high inflation, low disposable income, compressed wages, and general economic hardships take their toll.”

https://www.aljazeera.com/news/2020/12/21/economic-woes-force-zimbabweans-to-forego-festivities-this-year


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“…quantitative easing, especially in Europe and the United States, has distorted the stock market, or even the prices of corporate bonds and properties.

That will trigger a big problem, which is if central banks in future fail to effectively control and reduce sequela brought about by quantitative easing, then not only will stock, bond and real estate markets be likely to see rapid adjustments, and that brings serious systemic risk to financial markets in the future.”

https://www.thestandard.com.hk/section-news/section/2/225858/Crazy-easing-may-put-markets-in-tight-corner


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Container shipping, the backbone of the global trading system, is showing signs of fatigue as the pandemic descends into its darkest days.

“Carriers reaping the biggest profits in at least a decade are struggling to operate reliably as bottlenecks worsen around ports from southern England to Shanghai, contorting supply chains for everything from car parts to cosmetics and medical equipment. Just 50.1% of container vessels arrived on time in November.”

https://www.bloomberg.com/news/articles/2020-12-22/bottlenecks-rattle-world-economy-backbone-of-container-shipping


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This was the year that coronavirus fears turned American shoppers into hoarders. There have been widespread shortages on products like toilet paper, hand sanitizer and flour as people prepared for the long stretches of isolation that have become commonplace during the pandemic.

But for one segment of the population, preparing for the worst was a way of life even before the pandemic. “Preppers” or “survivalists,” as they’re known, have been around for years, buying elaborate survival kits, yearlong supplies of nonperishable foods and even elaborate underground bunkers.”

https://www.cnbc.com/2020/12/19/what-doomsday-preppers-stock-up-on.html


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

Public service announcement: If you’re struggling with the reality of these posts, confidential and free support is available at doomersupport.org.

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