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Democratic lawmakers and advocates are urging Joe Biden to back legislation proposing unprecedented investment in America’s ailing water infrastructure amid the country’s worst crisis in decades that has left millions of people without access to clean, safe, affordable water.

Boil advisories, leaky lead pipes, poisonous forever chemicals, bill arrears and raw sewage are among the urgent issues facing ordinary Americans

The majority of water and wastewater systems nationwide are also unprepared to cope with the climate crisis which is causing increasingly frequent unpredictable extreme weather events like the Arctic freeze that disrupted water and energy supplies across Texas last week.”

https://www.theguardian.com/us-news/2021/feb/25/joe-biden-water-act-bernie-sanders


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The Texas electricity crisis last week has morphed into a credit crisis in the state’s wholesale power market, where participants have begun defaulting on a portion of the $50bn in energy purchases made during record cold weather, according to an update from the grid operator…

“The extent of the potential liquidity crisis will become clear as more invoices are sent out.”

https://www.ft.com/content/1e87f988-e1c2-4970-893a-ff26dcbdd103


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Biden is already backtracking on his promises to provide student debt relief… Let’s be clear about another thing. Biden absolutely has the legal authority to use executive power to cancel all federal student debt…

“As he rambled on, Biden gave the distinct impression that he preferred not to have the power to do so. That way he could blame Congress should his campaign promises go unkept.”

https://www.theguardian.com/commentisfree/2021/feb/25/joe-biden-student-debt-american-students


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Powell pulls his punches on benefits of more fiscal stimulus: As the pandemic ravaged the US economy in 2020, Jay Powell publicly pushed Congress to approve more government stimulus to support the recovery and complement the central bank’s easy money policies.

“But in recent weeks, the Fed chair has switched to a more neutral stance on the need for more fiscal support, just as US President Joe Biden and Democratic lawmakers are trying to approve an additional $1.9tn in government spending.”

https://www.ft.com/content/0dd48851-f442-4e3e-a068-532dd9f05137


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The Federal Reserve says its Fedwire Funds, Fedcash and some check clearing services have resumed normal operations after a more than three-hour disruption to more than a dozen critical central bank payment services forming the backbone of the U.S. banking system

““Our technical teams have determined that the cause is a Federal Reserve operational error,” the Fed said on Wednesday on its website.”

https://www.reuters.com/article/us-usa-fed-fedwire/federal-reserve-says-investigating-disruption-to-fedwire-other-services-idUSKBN2AO2I1?il=0


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US President Joe Biden is to order a review of strategic supply chains in the pharmaceutical and electronics industries.

“He wants to identify areas in which the US is too dependent on other countries – a problem exposed by the Covid-19 pandemic.”

https://www.france24.com/en/tv-shows/business-daily/20210224-biden-to-order-review-of-strategic-supply-chains-facebook-news-australia-sncf


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China has accused Australia of being part of an “axis of white ­supremacy” because of our intelligence alliance with Canada, New Zealand, the United Kingdom and the United States.

“In its state-run media mouthpiece – the Global Times – Beijing said the alliance, known as Five Eyes, was taking co-ordinated action against China. “They have formed a US-centred, racist, and mafia-styled community, wilfully and arrogantly provoking China and trying to consolidate their hegemony as all gangsters do,” the tabloid wrote.”

https://www.news.com.au/news/five-eyes-china-accuses-australia-of-being-part-of-an-axis-of-white-supremacy/news-story/14599f6ca8e6100632b30557c2105a75


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Chip shortage leads Japan automakers to post 4.5% slump in January global output.

“Global production at Japanese automakers including Honda Motor Co slipped 4.51% in January from last year as a widespread chip shortage forced the industry to cut production.”

https://www.reuters.com/article/us-japan-automakers-output/chip-shortage-leads-japan-automakers-to-post-4-5-slump-in-january-global-output-idUKKBN2AP0SC


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JPMorgan warns that a consumer credit crisis could derail India’s economic recovery

“A major risk to India’s economic recovery is that millions of households and small businesses may potentially be cut off from the credit they need, according to JPMorgan’s chief emerging markets economist.”

https://www.cnbc.com/2021/02/26/jpmorgan-a-consumer-credit-crisis-in-india-could-derail-economic-recovery.html


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Andrew Bailey has warned the European Union against mounting a raid on the City of London, saying the Bank of England will “resist very firmly” any moves by Brussels to force financial trading worth trillions of pounds to relocate following Brexit

“Bailey said steps forcing the relocation of euro derivatives clearing away from the UK would represent a “serious escalation”.”

https://www.theguardian.com/business/2021/feb/24/bank-of-england-to-resist-firmly-eu-raid-on-london-warns-governor


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“After more than a decade of balance sheet expansion the Bank of England is now sitting on £739bn of gilts, equivalent to 35% of the UK’s national debt. The BoE’s current programme of purchases will take it to £875bn…

The real question is how the BoE should manage its record-size balance sheet in an environment of high government debt.

https://www.omfif.org/2021/02/monetary-rethink-required-on-bank-of-england-debt-holdings/


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Merkel’s coalition bickers over ‘wise men’ leadership and rising debt:

“A bitter row has broken out between Angela Merkel’s coalition partners over who to appoint as chair of the powerful economic council that advises the government, in a sign of rising political tensions ahead of parliamentary elections.”

https://www.ft.com/content/a797c67c-a6de-4a18-a149-1e1fa7eaf8f4


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Prime Minister Pedro Sanchez announced an extra 11 billion euro ($13.4 billion) package on Wednesday to help Spain’s small and mid-sized companies and the self-employed cope with the economic crisis…

“A government source said the plan, whose contents were still being discussed with the Bank of Spain and the banking sector, would include haircuts for state-backed loans and recapitalisations of SMEs.”

https://www.reuters.com/article/us-health-coronavirus-spain-aid/spain-announces-11-billion-euro-package-to-help-companies-face-the-covid-crisis-idUSKBN2AO0UF


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Rich countries’ governments borrowed $18 trillion from bond markets in 2020—more than ever before—but their borrowing costs hit a record low, due to a big rise in bond purchases by central banks, as well as a lack of concern about public debt levels among private investors.

The jump in government bond sales during the first year of the coronavirus pandemic was almost twice that recorded when the global financial crisis struck.

https://www.wsj.com/articles/rich-countries-borrowed-18-trillion-in-2020-few-seem-worried-about-paying-it-off-11614251857


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Developing nations at risk of debt crisis due to Covid-19: World Bank head:

“A debt crisis is a prominent risk for some of the countries at the bottom, and that has to do with the difficulty of getting new investment: David Malpass.”

https://www.livemint.com/industry/banking/developing-nations-at-risk-of-debt-crisis-due-to-covid-19-world-bank-head-11614262606641.html


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Lebanon’s economic meltdown is not just leaving gaping holes in state coffers, with thieves now plucking Beirut’s manhole covers for scrap.

“Governor Marwan Abboud told AFP Wednesday that soaring poverty had led to a spike in the theft of manhole covers, because “they are made out of cast iron which has become much more expensive.””

http://www.naharnet.com/stories/en/279689


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Inflation worries have flared as Congress pushes forward with a $1.9 trillion fiscal relief package amid rising commodity prices and long-term interest rates

“[But] what’s needed is more production of the goods in the economy that are in short supply right now, not cutting off the flow of funds that supports that production.”

https://www.bloomberg.com/opinion/articles/2021-02-25/inflation-is-more-about-supply-chain-shortages-than-price-hikes


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One of the most powerful US bond managers has warned of an “inflation head fake”, where misplaced concerns about a rise in consumer prices cause a jump in bond yields.

“The comments by Dan Ivascyn, chief investment officer at Pimco, which has $2.2tn under management, come after long-dated US Treasury yields climbed to their highest level in a year.”

https://www.ft.com/content/9ed5c0f2-5c2a-4a1f-98f6-e864f5d62e24


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While oil’s dizzying collapse is still fresh for many traders, rumblings are starting to emerge that by the end of next year prices could once again top $100 a barrel.

“Azerbaijan’s Socar Trading SA predicts global benchmark Brent could hit triple digits in the next 18 to 24 months, and Bank of America sees potential spikes above $100.” [We need to hope not as oil prices over $100 p/b are potently recessionary and oil price spikes can puncture debt bubbles, of which we have a few rather large ones.]

https://www.bloomberg.com/news/articles/2021-02-24/whispers-of-100-oil-return-as-crude-shakes-off-covid-s-clasp


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

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