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[A timely reminder that global growth was already constrained and excessively reliant on the creation of new debt *before* the pandemic.]

Global growth narrative set to shift as pre-pandemic legacy issues resurface… the old problems that dogged China’s economy before the pandemic struck: over-investment, excess capacity and too much state intervention in the allocation of resources have not gone away.

This contains an important lesson for other economies: as the effects of the pandemic fade, old problems will start to resurface.

The biggest challenge facing advanced economies prior to the pandemic was the extremely weak rate of productivity growth across the developed world, said Neil Shearing, group chief economist at Capital Economics in London.

The consensus is that the pandemic has compounded matters…”

https://www.cityam.com/global-growth-narrative-set-to-shift-as-pre-pandemic-legacy-issues-resurface/


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The global economy needed a smooth vaccine roll-out – that’s not happening

Experts have made clear that they don’t expect economies around the world to bounce back from the Covid-19 shock at the same speed. But developments this week underscore the risk that Europe could fall even further behind the United States and China.”

https://www.kmjnow.com/news/the-global-economy-needed-a-smooth-vaccine-rollout-thats-not-happening/


U.K. 10-Year Inflation Expectations Climb to Highest Since 2008… It follows record demand at a 10-year inflation-linked government bond last week, a sign that investors are scrambling to hedge their portfolio against the prospect of rising consumer prices.”

https://www.bloomberg.com/news/articles/2021-03-15/u-k-10-year-inflation-gauge-advances-to-highest-since-2008


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Six charts that show how Covid hit UK economy harder than financial crisis:

The only sector that the pandemic has not infected appears to be the housing market, where supercharged prices just keep on rising.”

https://www.telegraph.co.uk/business/2021/03/15/six-charts-show-covid-hit-economy-harder-financial-crisis/


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“‘Without it we’d starve in a week’: The London food hub saving thousands from hunger

Winding its way through the streets of north London, this seemingly endless queue is a sobering wake-up call to how people are living hand-to-mouth in modern Britain.”

https://metro.co.uk/2021/03/15/london-food-hub-saving-thousands-hunger-14242006/


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With UK police under fire, Boris Johnson pushes new bill that could end peaceful protests:

“The UK government is attempting to justify flagship legislation that critics say would hand the police and ministers powers that could seriously curb the ability of citizens to protest, at a very difficult time.”

https://edition.cnn.com/2021/03/16/uk/uk-crime-bill-sarah-everard-protests-clampdown-intl-gbr/index.html


Greece Tries First 30-Year Debt Sale Since 2008 Financial Crisis: Greece is following others in the region in seizing on low borrowing costs to finance its pandemic recovery.”

https://www.bloomberg.com/news/articles/2021-03-17/greece-tries-first-30-year-debt-sale-since-2008-financial-crisis


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Russia may spend billions of dollars from its wealth fund this year on infrastructure and other investments, and projects related to Rosneft PJSC’s huge Vostok Oil venture in the Arctic are high on the list of candidates, according to two officials with knowledge of the discussions.

“The largesse could represent a significant boost in spending as the government has been cutting back on other stimulus introduced last year amid the coronavirus pandemic.”

https://www.bloomberg.com/news/articles/2021-03-16/russia-mulls-spending-wealth-fund-billions-on-infrastructure


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One year since the coronavirus pandemic hit, China’s young people are still having a hard time finding jobs.

The unemployment rate for those aged 16 to 24 was 13.1% as of February, far above the national urban jobless rate of 5.5%, the National Bureau of Statistics said Monday.”

https://www.hellenicshippingnews.com/chinas-young-people-struggle-to-find-jobs-as-unemployment-rate-holds-at-13-1/


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Beijing has ordered all levels of government across China to lower their debt levels, as leaders move to address the fiscal risks that arose last year when policymakers boosted spending and cut taxes to fight the economic fallout from the coronavirus pandemic.”

https://www.scmp.com/economy/china-economy/article/3125672/china-debt-state-council-says-local-governments-must-tighten


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Fearing a Property Bubble, China Overhauls How It Sells Land

“With the years-long boom continuing despite the coronavirus pandemic, authorities are now sounding the alarm and pushing big cities to coordinate land auctions.”

https://www.wsj.com/articles/fearing-a-property-bubble-china-overhauls-how-it-sells-land-11615896003


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The Brazilian economic canary in the coal mine:

Brazil is Latin America’s largest economy, so a full-blown Brazilian economic crisis could have a domino effect on the rest of Latin America’s troubled economy. It could do so in much the same way as economic troubles in Thailand triggered the 1998 Asian economic crisis.”

https://thehill.com/opinion/finance/543123-the-brazilian-economic-canary-in-the-coal-mine


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Tens of thousands of Bolivians answered an opposition call Monday for protests against the arrest and detention of former president Jeanine Anez on charges of leading a coup d’etat against her socialist predecessor Evo Morales.

“Conservative Anez, 53, was placed in pre-trial detention Sunday after she was arrested on charges of terrorism, sedition and conspiracy.”

https://www.france24.com/en/americas/20210316-tens-of-thousands-of-bolivians-protest-over-ex-president-s-arrest


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Unemployment in Africa’s largest economy surged to the second highest on a global list of countries monitored by Bloomberg.

The jobless rate in Nigeria rose to 33.3%… The oil producer surpassed South Africa on a list of 82 countries whose unemployment rates are tracked by Bloomberg. Namibia still leads the list with 33.4%. Nigeria’s jobless rate has more than quadrupled over the last five years.

https://www.bloomberg.com/news/articles/2021-03-15/nigeria-unemployment-rate-rises-to-second-highest-on-global-list


In a country [Nigeria] plagued by insecurity following a wave of kidnappings of schoolchildren in its increasingly lawless north, there are concerns that the “stagflation” combination of rising unemployment and [especially food] prices and low growth could trigger significant social unrest.”

https://www.timeslive.co.za/news/africa/2021-03-16-stagflation-stalks-nigeria-as-food-prices-unemployment-soar/


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A perfect storm is pushing economies and children in sub-Saharan Africa into crisis:

“It is unlikely that in any twelve-month period, at any time in human history, the prospects of hundreds of millions of children have taken as dramatic a reversal as has just occurred for sub-Saharan Africa’s next generation.”

https://www.news24.com/news24/columnists/guestcolumn/opinion-a-perfect-storm-is-pushing-economies-and-children-in-sub-saharan-africa-into-crisis-20210316


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Angry protesters have been peacefully pushed back after they stormed the presidential palace in Yemen’s southern city of Aden, the seat of the war-torn country’s internationally-recognised government.

“Demonstrators had broken into the Maashiq Presidential Palace earlier on Tuesday amid public anger over the lack of services, poor living conditions and depreciation of the local currency.”

https://www.aljazeera.com/news/2021/3/16/protesters-storm-presidential-palace-in-yemens-aden


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Jordan used tear gas on Monday to suppress protests against a curfew imposed to stem a severe outbreak of COVID-19, witnesses and residents said…

“Many of the protesters called on the government to resign and demanded an end to emergency laws in place since the outset of the pandemic.”

https://egyptindependent.com/jordan-uses-tear-gas-to-clamp-down-on-anti-lockdown-protesters/


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‘We are hungry’: Lebanese protest worsening economic crisis

“Outraged protesters returned to the streets of Lebanon’s capital Tuesday, blocking roads with burning tires and garbage containers as the currency continued to plummet to all-time lows and the country’s financial crisis intensified.”

https://abcnews.go.com/International/wireStory/hungry-lebanese-protest-worsening-economic-crisis-76491383


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Brilliant Energy LLC filed for bankruptcy in the Southern District of Texas, adding to a growing list of companies that have stumbled after power outages caused by a winter freeze in February

“Brilliant Energy is at least the fourth firm to seek bankruptcy protection in the wake of the Texas freeze, underscoring the crushing financial pressure the outages have put on power companies in the state.”

https://financialpost.com/pmn/business-pmn/brilliant-energy-files-for-bankruptcy-after-texas-power-crisis


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The ferocious sell-off in US government debt markets has spilled into corporate bonds, nudging companies’ borrowing costs higher during a time when the economy is still recovering from the pandemic shock

“…the rise in borrowing costs could counter Federal Reserve chief Jay Powell’s ambitions to keep his foot on the economic accelerator by keeping lending conditions easy.”

https://www.ft.com/content/9cefffa7-4842-42ed-9b59-fc17276fc2f4


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“…quantitative easing efforts have injected $7 trillion in paper money and liquidity… into the financial system the last 12 years, producing the biggest bond/stock bubble in the financial world’s history.

At some point soon, if interest rates are not allowed to free float again, either capitalism will be supplanted by complete government management of the economy like other socialist experiments that ultimately failed miserably, and/or confidence in our currency by foreigners could implode.”

https://seekingalpha.com/article/4413979-great-2021-bond-market-collapse


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America’s massive monetary and fiscal policy experiment is being conducted against the backdrop of a so-called everything asset and credit price bubble, which is very much larger and more pervasive than the earlier U.S. housing and credit market bubble…

A pop could be a disaster.”

https://nationalinterest.org/feature/us-economy-now-giant-bubble-pop-could-be-disaster-180266


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“If there is a bubble, the question is – what will burst it? …If central banks are serious about price stability, they must curtail purchases of government securities and enforce greater market involvement in the financing of government borrowing.”

“That could be the trigger the bubble worriers fear. The trigger is cocked, though the gun may not be ready to be fired just yet.”

https://www.thetimes.co.uk/article/if-there-s-a-stock-market-bubble-the-question-is-what-will-burst-it-x3nlk96mc


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Most poor countries could default on loan repayments by June 30 when the G20 debt relief window expires, economists have warned.

“Last year, the 20 richest countries offered a temporary suspension of debt-service payments owed to their official bilateral creditors to allow them to concentrate resources on fighting Covid-19 economic shocks.”

https://www.the-star.co.ke/business/kenya/2021-03-17-short-g20-debt-moratorium-could-trigger-defaults-economists/


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17 Countries Drowning in Debt:

Though countries may appear to be well-to-do or economically thriving, many countries are actually drowning in significant amounts of debt. That includes the United States, which ranks fifth on this list, and Japan.”

https://finance.yahoo.com/news/17-countries-drowning-debt-155206590.html


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To deal with the pandemic, governments around the world are spending like there is no tomorrow and, together with central banks, ripping up the rule books on how to fund it

The world is already reaching crisis point with the growing burden of global debt… The odds are that borrowing will keep rising, raising the risk of a major credit event at some stage.”

https://www.scmp.com/comment/opinion/article/3125430/day-reckoning-coming-coronavirus-pandemic-debt-only-question-when


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

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