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This is as good as it gets for the US economy: America has already been through a renaissance — it is unlikely to be reborn again

“…easy money flowing out of the Fed is threatening to weaken the dollar and feeding the rise of zombies — companies which earn too little to make even interest payments on their debt. They barely existed in the US 20 years ago, but accounted for 6 per cent of listed companies by 2010, and almost 20 per cent by last year.

The federal government and corporations are now so deep in debt, it is hard to imagine how they can further boost the economy.”

https://www.ft.com/content/05e48881-8be8-47fe-a8db-02176b832f53


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The great federal-debt Ponzi scheme. It’s like the pump part of a pump-and-dump scheme in the stock market – without the benefit of an exit strategy

This has real-world consequences… orders for oil- and gas-mining equipment languish at about a third of the mid-2010s level. US oil production, as I’ve noted in the past, continues to fall, and oil prices continue to rise.”

https://asiatimes.com/2021/07/the-great-federal-debt-ponzi-scheme/


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New York’s patchwork recovery masks vast inequities laid bare by Covid

A patchwork of indicators suggest the recovery from a pandemic that hit hard and early, caused close to 30,000 deaths out of a 8.4-million population and placed the metropolis in an economic deep-freeze will be similarly uneven.”

https://www.theguardian.com/us-news/2021/jul/04/new-york-pandemic-reopening-race-gender-inequality


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Businesses face financial cliff edge as UK Covid support winds down.

Debt repayment demands and tapering of furlough support combine to create doubts about survival… Bankers have also been raising the alarm. At a recent meeting with the prime minister, they warned about a potential “debt time bomb”, according to people familiar with what was said.”

https://www.ft.com/content/d27173f3-19ba-4d9f-b37e-82bc526be72d


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France struggles with worker shortages, supply chains as economy rebounds.

A shortage of qualified workers and supply-chain havoc are proving problematic for some companies as they try to ride France’s recovery from the pandemic but struggle to fill vacancies, business leaders said.”

https://cyprus-mail.com/2021/07/05/france-struggles-worker-shortages/


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German factory orders unexpectedly slumped in May amid weakness in the auto sector, according to figures released on Tuesday by Destatis…

“Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “This is a terrible number, even factoring-in the significant upward revision to the April data.””

https://www.sharecast.com/news/international-economic/german-factory-orders-unexpectedly-slump-in-may–8028487.html


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A trillion-dollar wave of non-performing loans could emerge in Europe next year as a result of the economic crisis caused by the pandemic.

As government support schemes and moratoriums on debts come to an end throughout this year, sales of bad loans by banks trying to clean up their balance sheets will climb in 2022, according to a report from advisory firm JLL.”

https://news.bloomberglaw.com/bankruptcy-law/pandemic-to-drive-over-a-trillion-dollars-of-european-bad-loans


China’s Local Governments Roll Over More Debt to Ease Risks. Local governments in China have more than doubled bond sales to roll over maturing debt this year, helping to ease their repayment risk.”

https://www.bloomberg.com/news/articles/2021-07-04/china-s-local-governments-roll-over-more-debt-to-ease-risks


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China’s central bank on Monday urged the nation’s banks to further step up lending to small businesses, while lowering their loan rates

The central bank asked banks to increase tolerance of bad debt accumulated from lending to small businesses, which are normally seen as risky borrowers in the state-dominated banking system.”

https://www.marketwatch.com/story/china-pboc-urges-increased-lending-to-small-businesses-271625482432


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Pandemic Pushes Millions of Small Thai Companies Into Crisis.

“Many small and medium-sized enterprises, the backbone of Thailand’s economy, are struggling with crushing debt loads that could force them out of business as the latest wave of Covid infections dims the prospects for an economic recovery.”

https://www.bloomberg.com/news/articles/2021-07-05/pandemic-pushes-millions-of-small-thai-businesses-into-crisis


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Sri Lanka’s risk premium for a default jumped, reflecting concern that the pandemic is damaging the nation’s ability to fill its foreign-exchange coffers ahead of at least $2.5 billion in dollar debt due in the next 12 months

“The central bank sought to calm investors late Monday, saying arrangements are already in place to settle the bonds due later this month.”

https://www.bloomberg.com/news/articles/2021-07-05/asia-s-highest-default-risk-spotlights-sri-lanka-debt-concerns


The Nigerian federal government spent a total of N1.8 trillion on debt servicing in the first five months of the year, representing about 98% of the total revenue generated in the same period.”

https://nairametrics.com/2021/07/04/nigeria-records-debt-service-to-revenue-ratio-of-98-between-january-may-2021/


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Algeria’s new prime minister, Aymen Benabderrahmane, faces an uphill struggle

Irrespective of concerns over his government’s legitimacy, Mr Benabderrahmane… must deal with looming economic collapse, continued social unrest and the ongoing coronavirus pandemic, which continues to spread through the country.”

https://www.thenationalnews.com/mena/2021/07/04/uphill-task-for-algerias-new-prime-minister/


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At least 43 people have drowned in a shipwreck off Tunisia as they tried to cross the Mediterranean from Libya to Italy, while another 84 were rescued…

The boat had set off from Zuwara, on Libya’s north-west coast, carrying migrants from Egypt, Sudan, Eritrea and Bangladesh, the humanitarian organisation said.”

https://www.theguardian.com/world/2021/jul/03/scores-dead-as-migrant-boat-sinks-off-tunisia


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Turkey’s economic slide sends support for Erdogan to all-time low… President’s construction spree sparks dissent, even in his ancestral stronghold…

“… Inflation has been stuck in double digits for most of the past four years and unemployment is about 14 per cent.”

https://www.ft.com/content/440e2976-ae6b-43ab-affd-72437c136296


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As Lebanon’s Crisis Deepens, Lines for Fuel Grow, and Food and Medicine Are Scarce

[There is a] distinct sense that the country is coming undone, as all but the wealthiest Lebanese now spend their days sweating through frequent blackouts, waiting in fuel lines that wrap around city blocks, and running from pharmacy to pharmacy to search for medicines that have disappeared from shelves.”

https://www.nytimes.com/2021/07/05/world/middleeast/lebanon-economic-crisis.html


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Afghans queue in their thousands for passports as mass exodus begins before Taliban return

With the Taliban making sweeping gains, poverty deepening and the prospect of a return to the anarchy and lawlessness of the 1990s, aid agencies warn that Afghanistan could be about to generate a new surge of refugees.”

https://www.telegraph.co.uk/world-news/2021/07/04/afghans-queue-thousands-passports-mass-exodus-begins-taliban2/


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World’s poor suffer as rich work from home

““The wholesale abandonment of the global poor by policymakers, opinion formers in the liberal press and the global rich in general is one of the most repugnant features of the international response to the pandemic,” says Toby Green, a prize-winning author and professor of African history at King’s College London.”

https://www.theaustralian.com.au/commentary/worlds-poor-suffer-as-rich-work-from-home/news-story/64be315597ca76ba1481bc6dfa15e990


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Vessel recycling rates hit 13-year high

“Rising steel plate prices lifts rates to levels last seen in September 2008, just before the global financial crash… Prices are nearly double the same period a year ago and already up 40% for tankers and 24% for bulk carriers, according to Baltic Exchange data.”

https://lloydslist.maritimeintelligence.informa.com/LL1137445/Recycling-rates-hit-13-year-high


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Plastic Makers Reel on Soaring Oil Costs, Rising Competition

“…the rising costs of crude and other raw materials — namely oil-based naphtha and liquefied petroleum gas — are coinciding with more petrochemical output and the inability of producers to pass on higher expenses to consumers.”

https://www.bloomberg.com/news/articles/2021-07-04/plastic-makers-reel-on-soaring-oil-costs-and-rising-competition


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Oil hits three-year high after OPEC+ abandons meeting

“Oil prices jumped to the highest level in three years…

…after OPEC and its allies abandoned a decision on increasing oil production as Saudi Arabia, Russia and the UAE struggled to reach a compromise.”

https://www.ft.com/content/c9746fbc-7a90-4c9a-9a52-30b44475aa9a


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Fastest rise in inflation since 2008 sets alarm bells ringing.

Fuel, food and transport costs soar in the 38 OECD nations as central banks debate when to scale back Covid stimulus schemes.”

https://www.telegraph.co.uk/business/2021/07/05/fastest-rise-inflation-since-2008-sets-alarm-bells-ringing/


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Post-Covid supply chain bottlenecks will take up to two years to resolve.

European companies are pushing up prices as supply disruptions lift costs and hamper their ability to match surging demand, according to executives gathered for a conference this weekend in southern France.”

https://www.independent.ie/business/world/post-covid-supply-chain-bottlenecks-will-take-up-to-two-years-to-resolve-40612873.html


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The Rise and Fall of the Ultimate Doomsday Prepper:

Barrett Moore had ordered 2 million N95 masks, held enough freeze-dried food to feed families hiding from global Armageddon for decades, owned a small arsenal of guns, and fortified a pole barn in which to wait out the collapse of civilization.”

https://theintercept.com/2021/07/05/barrett-moore-brad-thor-doomsday-prepper-the-haven/


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

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