“The UN has called on central banks not to increase interest rates and depart from the monetary policy being pursued by a large number of western regulators, including the Bank of England.
“A recession worse than that experienced after the global financial crisis could result from monetary regulators tightening policy and hiking interest rates, the United Nations Conference on Trade and Development (UNCTAD) has warned.”
“High interest rates paid by poorer nations spark fears of global debt crisis.
“Fears of a deepening global debt crisis have been highlighted by research showing that low-income countries are paying rocketing interest on their foreign borrowing… Ethiopia and Zambia have both seen 25-point increases in their debt servicing costs…”
“World economy roiled by simultaneous shocks echoing 2007 anxiety.
“The world economy is showing signs of a rapid downshift as it contends with a series of shocks — some of them self-inflicted by policymakers — increasing the likelihood of another global recession and the danger of major financial disruptions.”
“Energy crisis seen posing ‘existential threat’ to climate goals…
““We’re in a transformational moment,” said Steve Malkin, CEO of environmental consultancy Planet Mark, noting the war in Ukraine and resulting energy crisis posed an “existential threat” to countries’ sustainability goals.” [picture from Essex, UK, summer 2022].
“US coal prices surged past $200 for the first time as a global energy crunch drives up demand for the dirtiest fossil fuel.
“Spot prices for coal from Central Appalachia rose to $204.95 a ton for the week ending Sept. 30, the highest in records dating to 2005, according to data released Monday by the US Energy Information Administration.”
https://www.mining.com/web/us-coal-prices-climb-past-200-as-global-energy-crunch-boosts-demand/
“Wall Street: U.S. housing market to see the second-biggest home price decline since the Great Depression…
“Not only is there a building consensus on Wall Street that we’ve entered into a period of falling home prices, but there’s also a consensus it will be the second-sharpest home price decline since the Great Depression.”
“September’s Credit Wipeout Foretells Even More Pain in Junk Debt.
“The pain is just beginning for investors in US credit markets after Federal Reserve tightening and recession angst sent investment-grade bonds, high-yield debt and leveraged loans spiralling in September.”
“Canadian consumer confidence has dropped to near record lows again amid growing angst about the global economy.
“The Bloomberg Nanos Canadian Confidence Index, a measure of sentiment based on weekly polling, declined for a fifth straight week to touch some of the weakest levels ever outside of the last two economic crises.”
“The price of groceries could surge by £1.7bn due to the cost of carbon dioxide rising by as much as 3000%, new analysis has shown.
“The UK‘s food and drink sector could end up footing the mammoth extra bill for liquid CO2 if gas prices remain high, according to research by the Energy and Climate Intelligence Unit (ECIU).”
“‘Huge turnouts’ reported at UK cost of living protests.
“Thousands have gathered in dozens of towns and cities across the UK to register their anger at the cost of living crisis in what organisers describe as the largest wave of simultaneous protests seen in Britain for years.”
“Great Britain’s energy regulator has warned there is a “significant risk” of gas shortages this winter, which could also hit electricity supplies.
“Ofgem’s head of wholesale market management, Grendon Thompson, said a gas supply emergency could impose “load shedding” on the largest consumers, forcing gas-fired power stations to close.”
“European Union members are preparing for the possibility of power shortages this winter due to the continuing squeeze in energy supplies.
“This is according to reports citing a senior Brussels official, who said that the bloc is working on two scenarios featuring blackouts, Reuters wrote today.”
https://oilprice.com/Energy/Energy-General/Europe-Is-Preparing-For-Power-Outages-This-Winter.html
“Europe’s deglobalization and surging nationalism have echoes of the 1930s. Now it’s heading into a major energy crisis…
“The decade leading up to World War II was marked by a general climate of fear and anxiety in the West. Economic crises and mass poverty broadened the appeal of populist right-wing parties, and lasting trauma from World War I, combined with the Great Depression, fueled isolationism and nationalist foreign policies.”
https://fortune.com/2022/10/02/europe-similar-1930s-trends-populism-isolationism-energy-crisis/
“Europe ‘at epicentre’ of global manufacturing slump as costs soar…
“Germany’s manufacturing activity fell to 47.8 in September, from 49.1 the previous month, according to the S&P Global PMI, taking it further below the 50 level that divides growth from contraction. Analysts said “a growing number of customers” had either postponed or cancelled orders due to rising prices.”
“Worst ever bird flu crisis in Europe raises risks for next season – EFSA…
“The spread of highly pathogenic avian influenza (HPAI), commonly called bird flu, is a concern for governments and the poultry industry due to the devastation it can cause to flocks, the possibility of trade restrictions and a risk of human transmission.”
“China’s property crash: ‘a slow-motion financial crisis’…
“A property market that has contributed around one quarter of GDP has over the past decade turned sour, triggering a series of secondary effects that are smothering growth in the world’s second-largest economy. Logan Wright, a Hong Kong-based partner at consultancy Rhodium Group, calls the situation a “slow-motion financial crisis”.”
https://www.ft.com/content/e9e8c879-5536-4fbc-8ec2-f2a274b823b4
“This is the first significant chemicals downcycle for many years…
“Some chemicals companies were close to bankruptcy in late 2008… But then, Whoosh! In January of the following year, China launched the world’s biggest-ever economic stimulus package and global demand went through the roof… Ever since that year, up until very recently, China bankrolled the global chemicals industry.”
“Traffic was brought to a grinding halt in Agartala city [NE India] on Sunday as protests broke out in front of CNG (Compressed Natural Gas) refilling stations owing to an “abrupt” rise in the prices.
“The protests were staged mainly by the auto-rickshaw drivers. The Tripura Natural Gas Corporation, the state-owned company that deals in the distribution of CNG, has been accused of hiking the prices significantly.”
“Pakistan’s acute energy shortage is at risk of lasting years after the government was unable to secure a long-term supply of liquefied natural gas.
“Not one supplier responded to Pakistan LNG Ltd.’s tender to buy the power-plant fuel for between four to six years starting January, said traders with knowledge of the matter.”
“Why motorists should be worried about the fuel shortages for airlines in South Africa…
“Aviation expert Des Latham told ENCA that the knock-on effects of not having enough local refinery capacity paired with global supply chain issues and an overreliance on importing fuels could lead to further trouble for motorists.”
“Africa’s internet speed is at a record low. The economic impact is huge.
“Even South Africa, the continent’s internet speed leader—with an average mobile internet download speed of 68.9 megabits per second (mbps) is way below the global average mobile download speed of 77.7 mbps.”
“Tunisia: Protests and clashes likely to continue nationwide through at least late October.
“Protests and associated clashes are likely across Tunisia through at least late October due to the continued lack of a parliament and high unemployment. Thousands of protesters have periodically taken to the streets of Tunis and other major cities demanding President Kais Saied’s resignation following his decision to rule by decree…”
“Depositors, some armed, storm 3 Lebanese banks over withdrawal limits.
“Outraged depositors, at least two of them armed, stormed three commercial banks across Lebanon on Tuesday over withdrawal limits imposed on most clients throughout the country’s financial meltdown. Cases of bank hold-ups have been snowballing across Lebanon…”
“Iranian students have stepped up their protests in defiance of a crackdown by security forces, who allegedly cornered and shot a number of students at a prestigious university in Tehran on Sunday night.
“Anti-government protests ignited by the death of a young woman in police custody in mid-September have spread around the country at various levels of intensity, revealing a cultural chasm between Iran’s educated youth and an elderly male religious establishment.”
“Cuban protests after Hurricane Ian fade but anger over shortages simmers.
“The protests in Havana appeared to have subsided by Sunday evening, but long lines for food, fuel and medicine – typical in Cuba even before the hurricane – had formed again in the city on Monday morning. “This has been terrible. No light, no food, we lost everything in our freezer,” said Maria Carla Catala, 25…”
“Haitian police fire tear gas as thousands protest against government.
“The protest took place on the day schools were meant to re-open after a one-month postponement of the resumption of classes after the summer break because of the economic crisis… Henry acknowledged the right of people to protest over rising prices but condemned the organisers of looting, vandalism and violence.”
“Welcome to the Scary, New Inflationary World.
“Let’s face it: The days of inflation-free monetary stimulus that globalization facilitated — and serial crises subsequently deepened — are over. This will have all sorts of unintended consequences…”
“A new financial crisis may be on the horizon… [the picture is not to suggest that Credit Suisse is our immediate catalyst for one but its vulnerability is certainly ominous].
“Previous global financial crises have tended to start in dark corners of the system – and the vastly increased financialisation of almost everything means the system is now as opaque and potentially dangerous, given the levels of global volatility and uncertainty, as it has ever been.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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