We ain’t seen nothing yet:

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In a year of general upheaval, 2020 also gave rise to mass protests around the world.

“Though some tackled familiar themes like democratic freedoms, women’s rights and racial justice, others found new causes to rally behind as the emergence of Covid-19 sparked demonstrations against government lockdowns and mask mandates.”

https://www.france24.com/en/europe/20201228-2020-a-year-of-dissent-and-civil-disobedience


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“A Nation’s Economy Divided [US]: Breadlines vs. Bread Makers:

“People once in the middle class are struggling to secure food, shelter and a decent income.

“At the same time, others are enjoying rising home prices, new models of work and the pleasures of baking bread. This is America in 2020…”

https://www.bloomberg.com/features/2020-economic-recovery-inequality/


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Not a publication I often post but I agree with the article’s prognosis if not its solution:

The grinding “wealth gap” recession into which the American middle class and working class were thrust three decades ago, as manufacturing jobs were off-shored by self-interested politicos of both parties, is about to morph into a depression.”

https://nationalinterest.org/blog/politics/us-economy-teetering-precipice-depression-175321


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“Global Crisis Debt Is Fine for Citizens Ruing Tough Times Ahead.

People around the world want governments to spend more to help economies survive the coronavirus as they ponder a bleak outlook for their own finances in the coming year.

https://www.bloomberg.com/news/articles/2020-12-30/global-crisis-debt-is-fine-for-citizens-ruing-tough-times-ahead


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“The biggest difference between Covid-19 and previous global economic crises has been the willingness of governments to spend their way out of slump…

The consequence of so much of the West rippling its fiscal muscles is eye-popping national debt. That is fine while interest rates remain low. But living on the never-never is only sustainable short term.”

https://www.thisismoney.co.uk/money/comment/article-9093397/ALEX-BRUMMER-Living-borrowed-time-debt.html


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“Boarded-up shops and cafés, food banks under pressure, unemployment rising sharply…

“...the economic impact of the coronavirus pandemic in Portugal has reawakened painful memories of the European debt crisis just as they were beginning to fade.”

https://www.ft.com/content/a26190fe-ed4b-47b6-be9b-f28c4b8b6d8d


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Italy’s main banking and industry associations have urged European Union authorities to temporarily ease EU bank rules on loan defaults and credit provisioning to help businesses cope with the impact of the COVID-19 pandemic…

“Italy, which has suffered the highest number of COVID-19 deaths in Europe, is also facing a major economic shock with GDP set to drop 9% this year, according to government forecasts, putting the future of thousands of companies at risk.”

https://uk.reuters.com/article/italy-banks-eu/italy-business-lobbies-urge-eu-to-ease-credit-default-rules-idUKL8N2J82LG


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“This fiscal year alone, the issuance of new Japanese government bonds (JGBs) will be about ¥112 trillion — the highest ever… Japan will need to start seriously discussing how it will be dealing with its debt once the pandemic eases — otherwise, it may face severe ramifications

“The idea of promoting government spending, known as modern monetary theory (MMT), has been gaining traction recently.”

https://www.japantimes.co.jp/news/2020/12/29/national/pandemic-japan-fiscal-sustainability/


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Smaller Chinese companies and those in the retail industry are struggling to access credit amid a weak recovery in consumer spending, according to China Beige Book International, a provider of independent economic data…

“The CBBI’s analysis provides a more subdued picture of China’s economic recovery than official data show…”

https://www.bloomberg.com/news/articles/2020-12-28/chinese-retailers-see-rise-in-loan-rejections-beige-book-says


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“…[in November China’s] consumer price index fell into negative territory for the first time in over a decade…

The persistent weakness of Chinese prices indicates subdued household demand and poses a challenge for the People’s Bank of China as it tries to manage the recovery in other areas of the economy, analysts said.”

https://www.ft.com/content/656e75f8-e01f-483d-9a67-087e843e8cdf


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Are we on the cusp of an emerging market debt crisis? In November, the Institute of International Finance (IIF) came out with some chilling numbers… The IIF expects global debt to exceed $277 trillion in 2020 or 365 percent of global gross domestic product (GDP). The 320 percent of global GDP it represented in 2019 already constituted a mountain of debt.

“The situation looks particularly grim for emerging markets…”

https://www.arabnews.com/node/1784041


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Kenya is staring at an economic crisis. Already, there are concerns that the government may not meet its obligations, such as paying salaries, servicing debts and other recurrent expenditures.

“But this has been building up for years, and only worsened by the coronavirus pandemic, which has shrunk economies as productive ventures collapsed.”

https://allafrica.com/stories/202012290486.html


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“A landlocked country in southern Africa, and the world’s second-largest copper producer, Zambia has been lashed by a plunge in commodity prices.

“Starved of income, the government announced in mid-November that the country would no longer pay creditors — and the prices of basic goods began to rise.”

https://uk.finance.yahoo.com/news/debt-covid-double-whammy-zambia-045738121.html


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Iran Cuts Power Supply To Iraq On Unpaid Debt:

“Iran has reduced exports of natural gas to its neighbor Iraq claiming the latter owed it more than $6 billion for supplies already made. The cuts were made two weeks ago, and further cuts will be made, Iranian officials said.”

https://oilprice.com/Latest-Energy-News/World-News/Iran-Cuts-Power-Supply-To-Iraq-On-Unpaid-Debt.html


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Venezuela remains at the summit of my monthly list of the world’s top inflators—those countries in which I measure the annual rates of inflation to exceed 25 percent per year. The country is still firmly in the grip of hyperinflation, with an annual inflation rate of 2,436 percent by my measure.”

Hanke’s list of most dangerously inflating currencies:

https://www.nationalreview.com/2020/12/hankes-inflation-dashboard-venezuela-still-leads/


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Investment banks across the world have generated a record $124.5bn in fees this year as companies raced to raise cash to outlast the pandemic.

“The windfall came as lenders earned all-time high fees underwriting debt and equity offerings for clients like aeroplane maker Boeing, property rental site Airbnb and telecoms group SoftBank, according to data provider Refinitiv.”

https://www.ft.com/content/c7bbdc4e-2fc9-424b-ab0b-a3acd8f20557


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Margin balances have reached a new record high as a widening class of affluent Americans borrowed against their portfolio investments to buy more stock:

“Investors borrowed a record $722.1 billion against their investment portfolios.”

https://www.investopedia.com/margin-debt-reaches-new-high-5093761


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2020 has been the most remarkable year for the global financial markets.

“After the Covid-19 pandemic triggered the worst crash in a generation, unprecedented stimulus measures and vaccine breakthroughs have sent stocks roaring back to record highs.”

https://www.theguardian.com/business/2020/dec/30/ive-never-seen-anything-like-it-2020-smashes-records-in-global-markets


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

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