“The world is totally unprepared for the looming risk of recession…
“We can say that the Covid crisis created a once-in-a-generation economic crisis which has justified constant use of the magic money tree (read: vast money printing and borrowing) to get through it, but in truth we’ve had three major economic upsets in the space of 13 years…
“One might argue the real problem is that the sun has never shone brightly enough since the financial crash [2008] for the roof to get fixed.”
https://www.telegraph.co.uk/business/2022/05/27/world-totally-unprepared-looming-risk-recession/
“G7 urges Opec to raise output to cool oil market…
“Despite the G7’s common position on oil, it is unclear whether oil producing countries will heed their call for more action [I’m not convinced they can, as they have been struggling to meet their quotas for months!]. Saudi Arabia has been resisting western pressure to accelerate production increases to help bring down prices, insisting there is no lack of supply.”
https://www.ft.com/content/4addbaca-f511-4d83-8a6b-1f768ff49f21
“U.S. oil & gas rig count falls for first time in 31 weeks…
“The weekly rig count decline comes as some U.S. publicly traded firms continue to focus more on returning money to shareholders and paying down debt rather than boosting output… Since Moscow invaded Ukraine on Feb. 24, the U.S. government has urged drillers to produce more oil and gas…”
“Hurricane season menaces already stretched U.S. diesel supply.
“Forecasts of an above-average number of hurricanes in the North Atlantic Basin this year are heightening concerns over already depleted distillate inventories in the United States and Europe… In the past, hurricane landfalls have sometimes caused severe damage and often resulted in significant loss of production…”
“Fears of blackouts are fuelled as union boss warns [UK] rail strikes could last four days at a time.
“Industry insiders point to Drax power station in North Yorkshire, which can only stockpile supplies sufficient for two or three days and services millions of homes. Tesco and Puma Energy, which supplies garage forecourts, have also raised concerns about supply lines.”
“Swimming, the most popular physical activity in Britain, is at risk as soaring energy prices threaten the closure of hundreds of pools across the country.
“It has led to desperate measures with gym and leisure centres lowering pool temperatures, turning down lights and urging swimmers to reduce showering times to save on energy costs to keep pools open.”
https://www.ft.com/content/7760087e-d4fd-43e5-a07d-c4afbc42e16f
“Electricite de France SA’s nuclear failures are sending ripples through European energy markets, threatening to undermine the continent’s plan to turn its back on Russian gas.
“Europe’s biggest producer of atomic energy, which usually exports cheap power during the winter, may be forced to import this year after cutting its output forecast a third time. A fleet hobbled by faults is not just a problem for France but for countries such as neighboring Germany…”
“Australian prices portend ’70s-style energy shock.
“On Thursday the Australian Energy Regulator increased the “default market offers” that apply to electricity retailers in New South Wales, South Australia and Queensland by 8% to 18%… These increases point to very serious issues within Australia’s electricity market. We may be in the early stages of an energy price shock comparable to the 1973 oil price crisis.”
https://asiatimes.com/2022/05/australian-prices-portend-70s-style-energy-shock/
“Families Told to Huddle Around One TV in Japan Bid to Save Power.
“Japan will assemble related cabinet ministers next week to discuss power crunches… The government is expected to draw up steps including restarting idled thermal power plants, NHK said.”
“China is driving a slump in hours worked globally…
“…the global labor market’s recovery has just gone into reverse… A new report by the International Labor Organization finds that the total global hours worked in the first quarter of 2022 is still 3.8% below the pre-pandemic benchmark, erasing gains made in 2021’s fourth quarter.”
https://qz.com/2169994/chinas-covid-lockdowns-drive-slump-in-global-hours-worked/
“Xi-Li Discord Paralyzes Officials Responsible for China Economy…
“…many government officials charged with implementing policy at the ground level aren’t sure who to listen to: Xi [Jinping] continues to emphasize the need for officials to push for zero Covid-19 cases, even as Li [Keqiang] continuously urges them to bolster the economy and hit preordained growth targets. That dilemma is leading to paralysis…”
“China State-Backed Builder Rocks Bond Market With Extension Plan.
“A Chinese property company long considered among the nation’s most resilient shocked investors with a proposed dollar-bond payment delay, raising fresh doubts about the financial strength of the industry’s higher-rated borrowers.”
“India seen facing wider coal shortages, worsening power outage risks.
“The energy-hungry nation expects local coal supply to fall 42.5 million tonnes short of demand in the September quarter, 15% higher than previously projected, due to higher growth in power demand and lower output from some mines. The grim forecast shows the extent of the fuel shortage in India…”
“Why a dozen countries could follow Sri Lanka into chaos… The IMF estimates that 60 per cent of low income countries across the globe are in or near debt distress – up from 30 per cent in 2015…
“Economists are keeping a keen eye on Kenya, Ethiopia and South Africa… Already, the IMF is in talks with Egypt, Tunisia and Pakistan about dispensing urgent loans…”
“Pakistani rupee drops to all-time low as IMF tranche talks fail.
“Pakistan’s rupee hit a historic low on Thursday of 202.01 against the US dollar in the interbank market, below the previous close of 201.92, after the failure of talks with the International Monetary Fund (IMF). Pakistan and the IMF have failed to reach a staff-level agreement…”
https://www.geo.tv/latest/419047-pakistani-rupee-drops-to-all-time-low-as-imf-tranche-talks-failed
“Pakistan’s banking sector is facing liquidity issues for the opening of international letters of credit (LCs) for Oil Marketing Companies (OMCs) and Oil Refineries for the import of refined and crude oil…
“Sources privy to the situation told ProPakistani that Pakistan is facing double jeopardy because the LCs issued by its banks are being returned by international lenders, as the credit lines have choked.”
https://propakistani.pk/2022/05/26/pakistans-oil-sectors-credit-crisis-could-affect-supplies/
“Bhutan faces grain shortages, spike in prices.
“Rising fuel import costs and global grain shortages have led to a spike in domestic prices, posing a risk of food scarcity for people in Bhutan, especially in the rural areas, economic affairs minister Loknath Sharma told Reuters on Thursday.”
https://www.swissinfo.ch/eng/bhutan-faces-grain-shortages–spike-in-prices—minister/47626082
“As Kyrgyzstan officials convey mixed messages on food security, farmers struggle on…
“…farmers [in Osh] are complaining that their fields have been waterlogged by especially intense rainfall. Gonijon Mirmakhmudov, a 58-year-old farmer in the rural community of Shark, leases 1 hectare of land on which he grows potatoes and other vegetables. “The endless rain in May flowed down in a stormy stream. It destroyed my entire future harvest,” he said.”
“Economic protests challenge Iran’s leaders as hopes for nuclear deal fade…
“The government had hoped that negotiations to revive the multilateral 2015 nuclear deal between Iran and world powers would lead to the removal of one source of economic hardship: Western sanctions…”
https://www.washingtonpost.com/world/2022/05/27/iran-nuclear-deal-subsidies-protests/
“Nigeria finance minister: low oil output barely enough to cover petrol imports.
“”We are not seeing the revenues that we had planned for,” Zainab Ahmed said. “When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import.”
“‘We don’t have food’: African leaders meet as crises grow.
“African leaders have gathered for a summit in Malabo, Equatorial Guinea, to address growing humanitarian needs on the continent, which is also facing increased violent extremism, climate change challenges and a run of military coups.”
https://abcnews.go.com/International/wireStory/food-african-leaders-meet-crises-grow-85021185
“Value of Lebanese pound drops to all-time low.
“The black market value of the Lebanese pound has fallen to an all-time low of 35,600 against the US dollar, a drop from 26,800 in the space of just two weeks, and a sign that Lebanon’s economic crisis is set to continue to cripple the country.”
https://www.aljazeera.com/news/2022/5/26/lebanese-pound-value-drops-to-lowest-level
“Gangs, inflation and political crisis bring Haiti economy to brink.
“With gas sales already subsidized by the government at a loss, the Haitian economy — fragile from incessant crime and political instability — appears close to collapse as the war in Ukraine sends fuel prices soaring.”
“Buried in the United Nations’ 2022 ‘Global Assessment Report on Disaster Risk Reduction’ published in May is the finding that escalating synergies between disasters, economic vulnerabilities and ecosystem failures are escalating the risk of a “global collapse” scenario.
“This stark conclusion appears to be the first time that the UN has issued a flagship global report finding that existing global policies are accelerating toward the collapse of human civilisation.” [This is where we are headed, unfortunately.]
You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.
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“… they have been struggling to meet their quotas for months!”
Agreed. Those “world leaders” that are pressuring the OPEC countries to produce more (at ~$100 per barrel) must look pretty foolish (If the conversation really happens rather than being something diplomats say to the press.)
Joe Diplo: Please, (Mr. OPEC dude) pump more oil. You can ignore those limits set by the rest of OPEC.
Sam Opec: (thinks – Dude, if only we could pump more oil at these prices we would bankrupt your sorry ass.). Says – Sorry, we must stand with our OPEC brothers.
You’ve triggered a project that I have been putting off for good reason – the results simply don’t matter. Still:
“Why a dozen countries could follow Sri Lanka into chaos…”. Only a dozen? Oh, maybe they didn’t want to include all those countries already in chaos.
1 Sri Lanka
2 Egypt
3 Yemen
4 Ukraine
5 Syria
6 Haiti
7 Lebanon
8 Nigeria
9 Iran
10 Iraq
11 Bhutan
12 Pakistan
13 UK
14 El Salvador
15 Venezuala
16 Peru
17 Argentina
18 Madagascar
19 Somalia
20 South Sudan
21 Mali
22 Ghana
23 Greece
24 Burma
25 North Korea
26 Transnistria/Moldova
27 Finland – they may be saved if Turkey successfully bars them from NATO
How many did I miss? How many was I too negative about??
Nice list, Lou. I’m sure there are more but it is whisky week here and I am temporarily distracted from doom!