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The world is being put at “extreme risk” by the failure of economics to take account of the rapid depletion of the natural world and needs to find new measures of success to avoid a catastrophic breakdown, a landmark review has concluded.

“Prosperity was coming at a “devastating cost” to the ecosystems that provide humanity with food, water and clean air, said Prof Sir Partha Dasgupta, the Cambridge University economist who conducted the review.”

https://www.theguardian.com/environment/2021/feb/02/economics-failure-over-destruction-of-nature-presents-extreme-risks


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One in eight UK construction firms have low or no confidence that they will survive until the end of April [at least that’s better than hospitality firms with 1 in 3 anticipating collapse].

“Analysts have cited a lack of new jobs, price rises for materials, labour shortages and lower productivity due to social distancing as contributing factors to the pessimistic view, which was revealed in a new Office for National Statistics (ONS) survey…”

https://www.constructionnews.co.uk/financial/one-in-eight-construction-firms-fear-collapse-within-three-months-01-02-2021/


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Europe’s economic pain is expected to worsen before it gets better, potentially boosting the popularity of populist leaders and the need for more action from the European Central Bank, analysts have said…

““Europe is in a deep hole. The pandemic is very uncertain, the rollout of the vaccine is frankly disappointing in Europe and therefore the risk of a deeper hole is there,” Erik Nielsen, group chief economist at UniCredit, told CNBC’s Squawk Box Europe.”

https://www.cnbc.com/2021/02/01/europe-covid-19-vaccine-rollout-expected-to-delay-economic-recovery.html


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With interest rates already ultra-low, Japan must switch to bolder fiscal spending to pull itself out of economic stagnation, said Kikuo Iwata, the central bank’s former deputy governor and architect of its “bazooka” monetary stimulus…

““It would be difficult for the BOJ to cut rates further due to concern over the impact on Japan’s financial system,” said Iwata, who joined the BOJ board with Kuroda back in 2013.”

https://www.reuters.com/article/us-japan-economy-boj-review/architect-of-bojs-bazooka-stimulus-calls-for-fiscal-firepower-to-beat-deflation-idUKKBN2A30DC


Pockets of inflation are flickering across some parts of Asia and fading in others, impacting central banks’ scope to further support economies in a region that’s leading the recovery from the Covid-19 pandemic.”

https://www.bloomberg.com/news/articles/2021-02-01/diverging-inflation-paths-shape-asian-central-banks-room-to-act


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“The economic battle against Covid-19 has blurred the boundaries between fiscal and monetary policy. But the threats to central bank independence run deeper than the current crisis.

A spectre is haunting the world of finance: central banks that have lost their power to shock. Charles Goodhart, veteran professor at the London School of Economics… has been proclaiming that, when inflation starts to rise again, these traditional guardians of rectitude will no longer be able to raise interest rates.”

https://www.omfif.org/2021/02/in-the-line-of-fire/


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Several central banks have ventured into unusual territory in the opening weeks of this year, announcing currency sales in advance as they tread a delicate line between dulling the impact of a sliding dollar and dodging the ire of the US Treasury…

““We are in an interesting moment when it comes to central banks straddling the fine line between [foreign exchange] intervention and [foreign exchange] manipulation,” said Alan Ruskin, chief international strategist at Deutsche Bank in a recent note to clients.”

https://www.ft.com/content/0383f3a4-41a0-464a-b831-fd1a09a6b1b0


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France has asked Germany to scrap a major gas pipeline project with Russia over the detention in Moscow of Alexei Navalny, a day after more than 5,000 people were arrested across the country for protesting in support of the opposition leader.

“”We have always said we have the greatest doubts on this project in this context,” European Affairs minister Clement Beaune told France Inter radio.”

https://uk.news.yahoo.com/france-urges-germany-cancel-russian-153643608.html


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How Western reaction to Navalny arrest and protests fuels Russian fear of ‘colour revolution’:

“The show of popular discontent indicates shared opposition to the state, with calls to liberate Russia and end corruption and violence by security forces…”

https://www.scmp.com/comment/opinion/article/3120179/how-western-reaction-navalny-arrest-and-protests-fuels-russian-fear


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Turkey protests: Hundreds of students detained as police accused of violence at rallies in Istanbul: Snipers seen on buildings as students accuse police of deploying ‘an army’ to suppress protests.

“Hundreds of people have been arrested and many were hit with plastic bullets and pepper spray in clashes between pro-democracy protesters and police in Istanbul on Tuesday.”

https://www.telegraph.co.uk/news/2021/02/03/turkey-protestshundreds-students-detained-police-accused-violence/


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Lebanon s caretaker government raised the price of subsidized bread and flour on Monday for the fourth time in less than a year amid a crippling economic crisis.

“Lebanon was grappling with the worst economic crisis in its history even before the public health crisis caused by the pandemic. The government defaulted on its foreign debt last year amid growing public debt, dwindling revenues and foreign currency.”

https://www.independent.co.uk/news/lebanon-raises-price-of-bread-amid-worsening-economic-crisis-lebanon-price-price-government-flour-b1796021.html


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Doctors treat patients in cars as Lebanon’s hospitals buckle amid a surge of Covid patients:

“‘We’re getting to the point of true disaster’, a doctor warns, as extreme lockdown and economic crisis threaten civil unrest… “We put mobile oxygen extractors in the parking lot and were doing blood tests and examinations from the cars,” said Dr Kozaily. “We were doing the best we could.””

https://www.telegraph.co.uk/global-health/science-and-disease/doctors-treat-patients-cars-lebanons-hospitals-buckle-amid-surge/


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In an interview with FRANCE 24, Philippe Lazzarini, the commissioner-general of the UN agency in charge of Palestinian refugees, warned that his agency was on the edge of financial collapse.

“He said he was only able to pay the salaries of his employees in late 2020 thanks to last-minute contributions and borrowing.”

https://www.france24.com/en/tv-shows/the-interview/20210202-we-re-on-the-edge-of-financial-collapse-unrwa-chief-tells-france-24


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Ten years after the revolution that sparked the Arab Spring, Tunisia, often hailed as its only success story, has yet to deliver the promised freedom, jobs and prosperity to its people

“Angry protesters are demanding employment, dignity and the release of detainees. They have burned tires, blocked roads and hurled stones at police forces who used tear gas and water cannons against them.”

https://www.indepthnews.net/index.php/opinion/4195-activists-fear-return-of-police-state-in-tunisia


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Nigeria’s security crisis has economic consequences

“The combination of the unrelenting terrorist attacks by Boko Haram mainly in the north-east, intensifying banditry in the north-west and the persistence of herdsmen-farmer conflicts in various parts of the country has generated significant adverse humanitarian, social and economic impacts.”

https://www.ft.com/content/0ca1244b-c07b-4cd4-a11a-75256d0b06be


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U.N. bid to avert oil spill off Yemen uncertain as Houthis mull ‘review’:

“- Yemen’s Houthi group has advised the United Nations to pause preparations to deploy a team to assess a decaying oil tanker threatening to spill 1.1 million barrels of crude oil off the war-torn country’s coast, a U.N. spokesman said on Tuesday.”

https://www.reuters.com/article/yemen-security-un/un-bid-to-avert-oil-spill-off-yemen-uncertain-as-houthis-mull-review-idUSL1N2K834M


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Oil giants Exxon and BP reported staggering losses for 2020 on Tuesday as the pandemic crushed energy demand and undercut oil prices.

“Exxon Mobil reported the largest losses in its history — nearly $US20.1 billion ($26.45 billion) for the fourth quarter, including more than $US19 billion to write down the value of company assets. For the full year, it lost $US22.4 billion.”

https://www.smh.com.au/business/companies/hit-by-pandemic-oil-giants-exxon-bp-post-multi-billion-dollar-losses-20210203-p56yzm.html


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Robinhood Markets has had discussions with banks about raising another US$1 billion of debt as the stock brokerage app grapples to keep filling orders amid a Reddit-fueled trading mania focused on heavily shorted stocks, Reuters reported.

“Any fresh capital would be separate from the US$3.4 billion that’s been raised by the firm in the past few days, including US$2.4 billion announced Monday, the news organization reported, citing people that it didn’t name.”

https://www.bnnbloomberg.ca/robinhood-explores-raising-us-1-billion-more-of-debt-reuters-says-1.1557439


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Fears of a market bubble are growing as stocks trade like bitcoin:

“The implication is that by cutting rates, first to stabilize markets, then to boost the economy, central bankers may have created a new kind of instability that is not easily solved. If asset markets are unstable now, most experts say raising rates would only make things worse.”

https://www.cbc.ca/news/business/stocks-bitcoin-bubble-robinhood-valuations-gamestop-1.5893779


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Why the GameStop stock frenzy is likely to end in financial crisis:

“The drama unfolding around GameStop is a tale of the internet levelling the playing field between at-home retail investors and Wall Street. The US stock market may become as retail dominated, and as volatile, as the Chinese market.”

https://www.scmp.com/comment/opinion/article/3120021/why-gamestop-stock-frenzy-likely-end-financial-crisis


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“The gamification of financial markets comes with many costs. This will end badly for the retail investors, though it is not clear exactly when and how, and some will make money along the way.

“In the process, financial markets will do what they have done for centuries, though it is little acknowledged: reallocate wealth from the uninformed to the informed.”

https://qz.com/1966818/with-gamestop-reddit-and-robinhood-gamified-the-stock-market/


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

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