“Extreme heat is slamming the world’s three biggest economies all at once.
“Estimating just how catastrophic climate change will be for the global economy has historically proven challenging. But this summer, it’s increasingly evident how quickly costs can pile up.
“Extreme heat and drought conditions are battering the United States, Europe and China, compounding problems for workers and businesses at a time when economic growth is already slowing sharply and adding to upward pressure on prices.
https://edition.cnn.com/2022/08/18/business/heatwave-global-economy/index.html
“US drought: Cities like Las Vegas could go dark and crops turn to dust as states fail to agree on water cuts.
“…despite its crucial status, seven states have allowed more to be taken from the Colorado river than it can naturally replenish in recent years. This week, officials missed a deadline to propose water cuts the government has said are necessary.”
https://inews.co.uk/news/world/us-america-drought-cities-dark-crops-dust-states-water-cuts-1804083
“[US] Home Sales Are Crashing Faster Than The Bursting Of The 2005 Housing Bubble…
“Existing home sales continued their historic plunge in July to reach the lowest level in 7 years outside of COVID, down roughly 1.7 million home sales in just the last six months… The current pace of decline is unprecedented.”
“US Mortgage Lenders Are Starting to Go Broke…
“The US mortgage industry is seeing its first lenders go out of business after a sudden spike in lending rates, and the wave of failures that’s coming could be the worst since the housing bubble burst about 15 years ago… “The nonbanks are poorly capitalized,” said Nancy Wallace, chair of the real estate group at Berkeley Haas…”
“The United Kingdom is enduring a summer of misery as its beloved health service descends into crisis, inflation soars, taps run dry and strikes halt trains. Meanwhile, the government is nowhere to be seen.
“The sense of collapse is only mounting; health leaders on Friday issued the grim warning of a “humanitarian crisis” without action to stop energy prices increasing over the winter.”
https://edition.cnn.com/2022/08/20/uk/british-government-crisis-intl-cmd/index.html
“UK Consumer confidence has hit a record low amid “acute concerns” over the soaring cost of living and a bleak economic outlook.
“The latest figures come as households face soaring energy bills, inflation hits its highest level in 40 years, and the Bank of England predicts a recession lasting more than a year will begin from autumn. Consumer confidence is now lower than in three recent major recessions…”
“The financial system will be sorely tested by our economic meltdown…
“When prices start to gallop ahead at the rate they are right now that will inevitably impact the financial system. Like how? Lots of small business will close, jeopardising the loans banks have made to them; the private equity industry’s mountains of debt will be unaffordable; a slice of the one in five mortgages still on variable rates will default; and bank balance sheets… will be stretched to breaking point.”
“France faces a high chance of electricity shortages and is not ruling out controlled blackouts this winter, according to Joannes Laveyne, a researcher at the electrical energy laboratory at Ghent University.
“As the gas price in Belgium breaks record after record, France is also dealing with exceptional rates for electricity – something that is unprecedented in high summer.”
“European natural gas prices continue to inch higher amid the continent’s worsening energy crisis and are now 10 times higher than usual for this time of the year, according to Bloomberg.
“Dutch TTF natural gas futures, the benchmark European price, hovered near 234 euros per megawatt hour Thursday, up about 3.5% intraday — and 381% higher from a year ago.”
“Germany’s producer prices rose strongly in July, driven by higher energy prices, posting the biggest increase ever recorded, the German statistics office Destatis said.
“Producer prices rose 37.2% on year in July, the German statistics office Destatis said Friday [echoes of Weimar; hyperinflation in developed nations no longer a far-fetched notion]. This follows a 32.7% increase in June and a 33.6% rise in May.”
“Germany to miss gas storage target amid warnings of winter shortages.
“Moscow has drastically cut flows to Europe via the Nord Stream pipeline since mid-June and is currently supplying only 20% of agreed volumes, blaming technical issues, but the move is widely seen as politically motivated in retaliation for sanctions over the invasion of Ukraine.”
“Nord Stream 1 pipeline to shut for three days in latest fuel blow to Europe.
“Russia will halt natural gas supplies to Europe for three days at the end of the month… The unscheduled maintenance on the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, deepens an energy standoff between Moscow and Brussels which has already helped send inflation surging in the region and raised the risk of rationing and recession…”
“Energy Prices Trigger Deindustrialization In Germany. German factories are struggling to cope with soaring energy costs, which may prompt many to leave the country for a cheaper location, Bloomberg has reported, citing industry sources.
“Energy inflation is way more dramatic here than elsewhere,” Ralf Stoffels, chief executive of BIW Isolierstoffe, a silicon parts supplier to a range of industries. “I fear a gradual deindustrialization of the German economy.””
“More smelters face threat of closure as Europe enters a power-starved winter.
“More European smelters are expected to shut as the region enters a power-starved winter that could force the continent’s big industrial companies to turn to imports just as they are trying to become more self-sufficient following war in Ukraine.”
https://www.ft.com/content/0906df5d-1b92-4de1-95d6-3ae7b1055897
“Japan urges its young people to drink more to boost economy…
“The “Sake Viva!” campaign hopes to come up with a plan to make drinking more attractive – and boost the industry.
“The contest asks 20 to 39-year-olds to share their business ideas to kick-start demand among their peers – whether it’s for Japanese sake, shochu, whisky, beer or wine.”
https://www.bbc.co.uk/news/world-asia-62585809
“Poorer Nations Face Unrest as Wealthy Countries Snap Up Fuel…
“…citizens in many nations have run out of patience… “The longer the energy crisis goes on, the more likely there is to be civil unrest around the world,” said Susan Sakmar, a visiting assistant professor at the University of Houston Law Center.”
“Sri Lanka fuel shortage takes massive toll on efforts to save wildlife.
“The shortages and limited rations are affecting conservation efforts, including the timely treatment of wild animals, regular patrolling to thwart poaching, and mitigation actions to limit human-elephant conflict.”
“Protests by Sri Lankan fishermen demanding a solution to the fuel crisis continued for the third day, and many fishermen have taken to the streets citing that they were unable to engage in their trade for almost three months…
“Sri Lankan fishermen are protesting citing one demand, which is the provision of sufficient Kerosene to power their boats so that they can set out to sea.”
https://www.newsfirst.lk/2022/08/18/lankan-fishermen-continue-protests-for-fuel/
“Power outage threat looms large as defaulting states [India] barred from power exchange.
“Power outages threaten to loom large in nearly 13 states including Andhra Pradesh, Madhya Pradesh, Rajasthan, Tamil Nadu, and Telangana which have been barred from buying and selling on power exchanges till they clear dues to power plants.”
“Oil marketers in Kenya have warned of fuel shortages because of government delays in paying them the subsidies meant to keep prices of gasoline low.
“The companies are owed 65 billion shillings ($542 million) for supplying fuel for the three months since June, they said in a letter to Kenya’s petroleum ministry seen by Bloomberg News.”
“Ghana raises interest rates to 22% in biggest move for 20 years.
“Ghana’s central bank has raised interest rates by 300 basis points to 22 per cent, its largest increase since 2002, as it seeks to tame soaring inflation and a fast-depreciating local currency. The rise was announced late on Wednesday after an emergency meeting of the bank’s monetary policy committee.”
https://www.ft.com/content/1ccade17-5704-4321-9987-b372b0b43396
“As Iraqi protesters rally, political deadlock leaves families without cash.
“[Khalil’s] family is one of about 370,000 families who qualify for the pension but are not receiving it because of the political deadlock, the official said. Iraq’s 10-month standoff since the election is the longest stretch without a fully functioning government in the nearly two decades since Saddam Hussein was overthrown…”
“‘I’ll Do it Again,’ Says Man Who Held Up Bank to Withdraw His Own Money [Lebanon]…
“His desperate actions are indicative of the mind-bending extent of Lebanon’s descent into a near-total economic collapse. After decades of financial management following a devastating civil war, the country truly stands on the brink: a near-failed state going through one of the world’s worst-ever financial crises.”
https://www.vice.com/en/article/wxnxez/beirut-bank-siege-bassam-al-sheikh-hussein-lebanon
“Geopolitical and climatic events are impacting the food system’s resilience.
“The COVID-19 pandemic. Supply chain strains. Climatic events. These disruptions were already pushing food prices up when Russia invaded Ukraine in late February. Today, war in one of the world’s six breadbasket regions1 and in the Black Sea, a critical supply and transit hub for wheat and fertilizers, is tilting global food security into a state of high risk.”
“The global crises laying waste to a divided world.
“A brutal pandemic; frightening climate change; a devastating war that drives widespread rearmament; severe trade disruptions; gigantic multinationals that take advantage of loopholes to avoid paying much-needed taxes. The world faces colossal global challenges and addressing them requires close international cooperation… However, signs of growing polarization and rift abound…”
You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.
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Real shocking news…thank you for these stories and seems 2022 is the year of the unraveling of the comfortable life we have been born to in modern society. Strange that lots of folks can’t connect the dots….
You are welcome! People are so conditioned to BAU; few have known anything different… And perhaps it is human nature to want to deny unpalatable realities.
Great thread P
Protests seem to be an energy sink, where the masses ask or demand someone else to create a solution for their situation. If this is the tipping point of our civilisation, protesting about it seems a great distraction and not the best solution. How do we face the crisis reality we are actually now entering?
Bobby, I wish I had a good answer to that question. I am still grappling with it.