“Governments will sink in a world drowning in debt. Rising interest rates and soaring inflation will leave many governments with unsustainable debts. Get ready for a wave of sovereign defaults…
“We are in an unprecedented credit bubble. Before the pandemic, the numbers were already alarming… I know a major debt-default storm is coming because it has started. Defaults are already on the rise and are going up faster than the increasingly opaque data.”
“World faces unprecedented global hunger crisis, U.N. chief says.
“”We face an unprecedented global hunger crisis,” Guterres told the meeting in Berlin via video. “The war in Ukraine has compounded problems that have been brewing for years: climate disruption; the COVID-19 pandemic; the deeply unequal recovery.””
“Copper’s weakness is a sign of a broader malaise in the global economy.
“They call it the bellwether of the global economy, or “Doctor Copper.” So copper’s recent decline to a 16-month low is an ill wind. Simply put, demand is dropping and buyers are fearful of a coming recession, both in the USA and in other major economies.”
“Flash [global] PMI data signal increased stagflation risks as growth weakens amid soaring cost of living.
“Early PMI survey data showed economic growth slowing sharply in the US, Eurozone and UK during June, with further weakness likely in coming months. Forward-looking indicators, such as survey gauges of new order inflows and business expectations of output in the coming year, have fallen to levels indicative of the US and European economies contracting in the third quarter…”
“Wall Street Faces Billion-Dollar Losses on Sinking Buyout Debt.
“Investment bankers in the US and Europe are bracing for potentially billions of dollars in total losses on big-ticket leveraged buyouts as they struggle to offload risky corporate debt that’s plunging in value amid a sweeping market selloff.”
“The [US] retail industry is up against a potential wave of bankruptcies following a monthslong slowdown in restructuring activity.
“There could be an increase in distressed retailers beginning later this year, experts say, as ballooning prices dent demand for certain goods, stores contend with bloated inventory levels and a potential recession looms. Last week, 90-year-old cosmetics giant Revlon filed for Chapter 11 bankruptcy…”
https://www.cnbc.com/2022/06/23/why-retail-industry-is-facing-bankruptcy-wave.html
“Almost half the adults in Great Britain are cutting back on the amount of food they buy as the cost of living crisis forces them to trim their weekly supermarket shop, the latest official figures have shown.
“In stark evidence on the effect of rising inflation on spending patterns, the Office for National Statistics said 44% of adults surveyed last month said they were buying less food – up from 18% at the start of the year.”
“Kwasi Kwarteng is poised to allow lower quality gas into Britain’s pipelines amid a scramble to protect the country from a looming energy crisis.
“The Business Secretary is discussing plans for less efficient lower calorie gas to be piped into the country’s networks, to make the most out of fuel available in the North Sea which would otherwise be unrecovered.”
“Germany’s Gas Woes About to Get Worse as Pipeline Set to Stop.
“Europe’s biggest buyer of Russian gas is bracing for a further drop in supply next month when a key pipeline shuts for maintenance — and fears the link may never return to full capacity… The Nord Stream shutdown will exacerbate an energy crunch in Europe…”
“Germany says its energy crisis may trigger Lehman-like contagion as the country moves a step toward to natural-gas rationing.
“Germany — Europe’s largest economy — moved into the second of its three-stage emergency gas plan on Thursday after Russia slowed supplies to the country, exacerbating concerns over an energy crunch.”
https://uk.finance.yahoo.com/news/germany-says-energy-crisis-may-054758916.html
“French fuel industry strike targets service stations and refineries.
“The CGT union has called a strike on Friday to protest at low pay for employees of the French energy giant Total Energies, particularly those who work in the company’s network of service stations.”
“Greek TV station showed viewers how to siphon petrol from people’s cars amid skyrocketing fuel prices.
“The station’s reporter, Costas Stamou, who was with the car expert, said the task is “not something terribly complicated,” according to a translation by Agence France-Presse. “You don’t even need a special tube, even a hose for balconies will do,” Stamou said, per AFP.”
“Car drivers in Hungary face refuelling limit at MOL, OMV pumps…
“MOL’s announcement halved the previous limit it imposed on refuelling. OMV said its 50-litre limit only applied to fuel that fell under the price cap, which the government imposed to since November to protect the population from surging inflation.”
https://www.reuters.com/world/europe/hungarys-mol-cuts-refuelling-limit-passenger-cars-2022-06-24/
“Europe Is Now in Its Worst Corporate-Bond Selloff in Decades.
“By almost any metric, this is Europe’s worst corporate-bond selloff in decades, surpassing even the 2008 financial crisis… Investors now are trying to parse how much rate hikes have already been priced into the market, and thus how much longer the corporate bond rout will last.”
“Up-ended global LNG markets deepen Australia’s power woes…
“Australian manufacturers have urged the new Labor government to intervene in the market to push down prices, and in response policymakers are working on plans to tighten agreements requiring exporters to offer supplies to domestic users first, before offering them abroad.”
“China’s premier has called for increased production of coal to stave off mass blackouts, as early summer heatwaves have prompted record electricity usage.
“On Friday, authorities again issued high temperature warnings for about a dozen provinces across the central and northern provinces, after consecutive days in the high 30s.”
“China’s steel mill owners are in a bad mood as demand takes a hit…
““There’s negative energy all round. The steel industry is just not making any profit,” Simon Wu said. A lot of steel — a key raw material in the manufacturing powerhouse — is sitting idle around the country amid a stop-and-start economy which is forcing down demand and prices.”
“Laos Finds Itself Deep in China’s Debt Trap Amid Signs of Economic Collapse…
“Laos is a Communist state, and public dissent is unwelcome. Yet, the people of this Southeast Asian country are increasingly getting angry and frustrated with the state of affairs. Oil shortages have begun hitting Laos, and long queues at petroleum stations are now a common sight.”
“Truck driver dies after waiting for 5 days in queue at fuel station in Sri Lanka.
“A 63-year-old truck driver has died in Sri Lanka after standing for five days in a queue at a filling station in the country’s Western Province, the 10th death reported due to prolonged waiting for fuel procurement in the debt-ridden island nation…”
“Pakistan may cede Gilgit Baltistan to China [on lease] to pay off its mounting debts.
“Despite providing power to the rest of the country, Gilgit-Baltistan has just two hours of power available, because the region is not part of Pakistan’s national grid. In addition to this, it suffers food shortages and has no control over its hydropower or other resources.”
“Incumbent Lebanese PM keeps post as economic crisis deepens…
“The new government’s main mission will be to continue talks with the International Monetary Fund over an economic recovery plan for Lebanon, which is in the grips of the worst economic and financial crisis in its modern history.”
“Gaza’s food crisis worsens as Ukraine war hits blockaded economy hard…
“Gaza’s economy was already devastated by the Israeli-led, 15-year-long blockade, which had massively impacted residents’ purchasing power, and the recent price hikes will only make matters worse… “Many families are eating less and lower quality food items…” Oxfam said in a statement.”
https://www.middleeasteye.net/news/gaza-food-crisis-worsen-ukraine-war-hits-hard
“Yemen’s Ticking Oil Bomb Threatens the World Economy. A spill from a rusting tanker anchored in the Red Sea would make the 1989 Exxon Valdez disaster look like a beach party…
“The risk to the global economy needs no exaggeration: Memories are fresh from the last time a single ship choked the waterway. But the damage caused by the Safer would be far greater than the economic costs imposed by the Ever Given in March 2021.”
“Eighteen people have died after a mass attempt by a huge crowd of African migrants to cross from Morocco into Spain’s enclave of Melilla.
“About 2,000 migrants approached Melilla at dawn on Friday and more than 500 managed to enter a border control area after cutting a fence with shears, the Spanish government’s local delegation said in a statement.”
“Report warns rising prices of essentials could trigger social unrest [Nigeria]…
“A report by SB Morgen, Nigeria’s geopolitical intelligence platform, notes that skipping inflation has never triggered political agitation in the country but warns the trend could change if the government does not take urgent steps to manage the current rising prices “responsibly”.”
“Protests force South Africa’s Eskom to widen power cuts.
“South African state power company Eskom said it would be forced to widen electricity cuts this weekend as labour protests linked to deadlocked wage talks disrupt operations… Eskom said earlier that the protests had included incidents of intimidation of working employees and blockades on roads leading to power stations.”
https://www.aljazeera.com/news/2022/6/24/protests-force-south-africas-eskom-to-widen-power-cuts
“‘We can’t get by’: Indigenous people keep up protests in Ecuador. Thousands of Indigenous people have joined a national strike in Quito to demand government action on rising costs…
“Several key streets in the city have been blocked since Tuesday, as protesters engage in a standoff with police at major intersections near the city centre. Protests have also taken place in cities across the country…”
“Argentinian truckers have continued to block many of the countries highways as part of action during an indefinite strike over fuel shortages and rising costs….
“Negotiations with the government collapsed on Wednesday as they failed to avert the strike called by the National Union of Carriers and Allied Workers of the Argentine Republic, United Carriers of Argentina and the Single Union of Port Administration Workers.”
“Crypto feels the shockwaves from its own ‘credit crisis’… Fear, uncertainty and doubt grip market as big names struggle…
“The deflating bubble in digital assets has exposed a fragile system of credit and leverage in crypto akin to the credit crisis that enveloped the traditional finance sector in 2008.”
https://www.ft.com/content/032b95dc-7feb-4a2d-8eac-c71235643c07
“Electricity used to mine bitcoin plummets as crypto crisis widens.
“The amount of electricity consumed by the largest cryptocurrency networks has decreased by up to 50% as the “crypto winter” continues to eat at the incomes of “miners” and financial contagion spreads further throughout the sector.”
You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.
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