“Saving markets from a pandemic meltdown comes with a cost: …Just as they had in 2008 when confronted by the global financial crisis, the central banks threw everything they had left in their GFC-depleted arsenals at the new [covid] crisis and even invented some new weaponry to go with their fresh bouts of quantitative easing…
“The stock markets have been – as they have been since the financial crisis — the only conventional source of meaningful returns, leading to a self-fuelling cycle of ever-increasing share prices that in turn has brought new investors to the market and convinced even more conservative investors that they couldn’t afford to sit on the sidelines…
“Markets, investors, companies and governments are now so addicted and exposed to low interest rates, however, that there’s no apparent path to normalising interest rates – even in an inflationary environment that warrants increased rates – that doesn’t risk another financial crisis.”
“US stimulus package leaves Europe standing in the dust: This will hasten Europe’s and the UK’s relative economic decline…
“Biden’s $1.9tn fiscal stimulus package, passed last week, may not be literally visible from space, but it is certainly of planetary scale. In the OECD’s March update to its forecasts, the organisation estimated that the US stimulus will add one whole percentage point to …global growth.”
https://www.ft.com/content/20096b0a-8a94-453d-8788-c3b15dc1704c
“The European Central Bank is reacting to rising interest rates in the world, particularly in the United States, by stepping up to increase security purchases.
“The eurozone and other countries in the world are out of sync with the United States in terms of achieving economic recovery, and this is pushing government policy makers to the edge.”
https://seekingalpha.com/article/4413677-european-central-bank-responds-rising-u-s-interest-rates
“The Portuguese economy is in a deep slump…
“More opportunities are not encouraging. The European Commission’s estimate points to a chain contraction of 2.1% of Portuguese gross domestic product (GDP) in the first quarter of this year, the biggest drop in 27 member states. The competition forum points to a chain fall of up to 6%.”
https://www.haveeru.com.mv/the-portuguese-economy-is-in-a-deep-slump-in-the-european-union/
“Coronavirus crisis in Spain: ‘I never imagined myself asking for help’…
“The coronavirus pandemic has triggered an “unprecedented” crisis that has done much to exacerbate the already significant social inequalities in Spain… According to Flores, “poverty and social exclusion are going to increase.””
“Dutch police officers intervened to break up an anti-lockdown protest in The Hague on Sunday on the eve of an election in the country.
“Police tweeted calls for protesters to return home repeatedly, stating that there were too many demonstrators even as more arrived at the protest.”
https://www.euronews.com/2021/03/14/dutch-police-break-up-anti-government-protest-ahead-of-election
“Liege [Belgium] this morning is recovering from a riot involving about 200 youths who broke away from a peaceful demonstration against police violence to attack police and ransack the city centre, sending nine people to hospital, including five police officers.
“The trouble began in the margins of a peaceful Black Lives Matter demonstration…”
“London police face backlash after dragging mourners from vigil for murdered woman…
“London police faced a backlash from the public on Sunday and an official inquiry into their actions after using heavy-handed tactics to break up an outdoor vigil for a woman whose suspected killer is a police officer.”
https://www.reuters.com/article/us-britain-crime-murder-idUSKBN2B605T
“Problems mount for Bank of England governor after weathering Covid storm… Andrew Bailey often argues the BoE has “ample firepower” to stimulate and support the economy as it recovers from Covid-19.
“But the central bank has been reeling from stinging criticism from its internal watchdog that it had serious “knowledge gaps” in understanding how QE worked, and an inability to explain the effects of the scale of asset purchases.” [hilarious that even the central bankers struggle to understand their own chicanery].
https://www.ft.com/content/7248bd6c-bff3-4052-8e02-60ddc4a22106
“British manufacturers are facing their biggest profits squeeze since the financial crisis, a survey warns.
“Research by Insider Pro found that firms had been hammered by the pandemic and red tape related to Brexit… They also face a ‘painful cash squeeze’ as uncertain demand makes it hard to plan stock purchases and nervous suppliers demand faster payments and recall loans.”
“The number of long-term unemployed in Sweden has hit a new record with many of those who were unemployed when the pandemic struck still without a job today.
““This is a serious situation, and an uncertain situation if you consider where we are in the infection,” Sweden’s employment minister Eva Nordmark told the country’s TT newswire.”
https://www.thelocal.se/20210313/long-term-unemployment-in-sweden-hit-new-record-due-to-pandemic/
“China’s Youthful, Debt-Fueled Spending Spree Sparks a Reckoning…
“In recent weeks, a grass-roots campaign on Chinese social media dubbed “coming ashore”—a metaphor for becoming debt-free—has been gathering steam, with people sharing their experiences and regrets about overspending and borrowing.”
“Alarm bells are starting to ring across emerging markets as countries brace for a new era of rising interest rates.
“After an unprecedented period of rate cuts to prop up economies shattered by Covid-19, Brazil is expected to raise rates this week and Nigeria and South Africa could follow soon, according to Bloomberg Economics.”
“A surge in Covid-19 cases has fomented a political crisis in Paraguay, as a week of protests at the inability of the country’s health system to cope threatens to undermine a weak government.
“The prohibitive cost of treatment for coronavirus and one of the slowest vaccine rollouts in the region have aggravated simmering discontent with inequality and corruption in Paraguay…”
https://www.ft.com/content/425f05d0-0931-4394-b559-bf6b9beed3f9
“South Africa student protests spread with calls for national varsity shutdown:
“The protest over tuition fees in a South African university is spreading nationally, with the students union calling for shutting 26 public universities across the country from Monday.”
“Health providers in the Democratic Republic of the Congo are struggling to contain fresh cases of Ebola virus, less than a year after the country’s tenth outbreak of the deadly virus was declared over.
“So far, 11 cases and four deaths have been confirmed by the Ministry of Health around the city of Butembo in North Kivu province.”
https://catholicoutlook.org/ebola-threatens-country-facing-covid-and-famine/
“Protests around Lebanon as local currency continues to slide:
“Lebanon’s currency plummeted to a new record low on Saturday, continuing its crash amid a worsening economic crisis that has triggered near-daily protests throughout the tiny Mediterranean country.”
“Influential countries are ‘turning their backs’ – economic destitution is driving Syria’s humanitarian crisis:
“This week, the Syrian lira collapsed to an all-time low of more than 4000 lira to the dollar, a 40 per cent fall from last year alone. In neighbouring Lebanon, where the economy is inextricably tied to Syria’s, the local currency tanked to a staggering 12,000 Lebanese pounds to the dollar.”
https://www.independent.co.uk/voices/syrian-war-ten-year-anniversary-economy-b1816969.html
“The UN World Food Programme’s country director for Myanmar has warned that civil unrest and growing economic paralysis risk pushing people in one of Asia’s poorest countries into hunger.
“…prices for food staples, fuel, and fertiliser were starting to rise because nationwide strikes and unrest were hitting supply chains, markets, and the banking system.”
https://www.ft.com/content/139b2103-eabc-4188-8ead-447998366a4a
“Fears mount over North Korean ‘great leap backwards’:
“There are mounting fears over food security and economic collapse…
“…there is no clear plan to vaccinate a population of 25m people.”
https://www.ft.com/content/49dd499f-e7a1-4dd1-9803-9702fbc52f11
“Minus $7,400 a day? How can shipping rates fall below zero?
“…Last week, average time-charter equivalent (TCE) rates for very large crude carriers (VLCCs; tankers that carry 2 million barrels of crude) sank to -$7,400 per day on the Middle East-Asia route. Multiplied by a voyage duration of around 50 days, that’s a net *cost* of $370,000 to the shipowner delivering a customer’s crude.”
https://www.freightwaves.com/news/minus-7400-a-day-how-can-shipping-rates-fall-below-zero
“Public Debt Isn’t the Problem, Soaring Deficits Are: For markets, it is not debt levels, but fear of uncontrolled debt growth, where crises are born…
“…the question is: What happens to market confidence and borrowing costs in the future?“
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
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