“[US] Freight Operators’ Peak Shipping Season Is Crumbling… “Typically in the last quarter of the year, cargo carriers from container lines to parcel operators bulk up their profits on strong demand.
“But a range of measures of shipping demand across the U.S. are sliding, freight rates are falling as a result, leading carriers to pull back capacity amid concerns a deeper downturn is coming.”
https://www.wsj.com/articles/freight-operators-peak-shipping-season-is-crumbling-11666118281
“You have to go back to the Great Financial Crisis (09) to find a September with fewer loaded import containers at the Port of Los Angeles. They haven’t just fallen off a cliff, they’ve jumped.”
https://twitter.com/FreightAlley/status/1582824108488028160
“Alcoa Surprise Loss Spells More Woes for World Economy.
“A surprise quarterly loss by US economic bellwether and aluminum giant Alcoa Inc. added to jitters over the world economy as the metal used in everything from iPhones to Pepsi cans hits headwinds.”
“World Steel Use to Fall in Another Bleak Sign for Global Economy.
“Global steel demand is set to contract this year as Europe’s energy crisis and China’s economic slowdown undercut consumption, according to the World Steel Association. Demand for the metal — which is widely viewed as an economic barometer — will drop 2.3% in 2022…”
“Biden says oil companies should ramp up production and cut prices at the pump instead of buying back stock, paying dividends.
““Invest in America for the American people. Bring down the price you charge at the pump, to reflect what you pay for the product,” Biden said… Biden also officially announced the release of 15 million barrels of crude oil from the Strategic Petroleum Reserve.”
“$200 Diesel Puts Biden in an Ugly Corner…
“Currently, the US has just 106 million barrels of diesel and heating oil in commercial stocks; the last time inventories were that low in mid-October was in 1951… Such low levels are alarming because diesel is the workhorse of the global economy. It powers trucks and vans, excavators, freight trains and ships. A shortage would mean higher costs for everything from trucking to farming to construction.”
“[US] Housing Market Recession: Home Builders Warn Collapse Is ‘Unsustainable’—And Prices Could Tumble Another 20%.
“Home builder confidence plunged for a tenth straight month in October as rising interest rates continued to weaken housing demand—prompting economists to warn an unexpected rise in new home sales last month may be short-lived and prices may be on the brink of collapse…”
“Liquidity Is Reaching Very Dangerous Levels… The Fed isn’t likely to stop raising rates anytime soon…
“The US Ten-Year Note Yield crossed the 4% point, a sign that investors are not interested in owning US debt at these levels and that the Fed keeps selling bonds to reduce the amount of money in circulation.”
https://seekingalpha.com/article/4547198-liquidity-is-reaching-very-dangerous-levels
“[UK’s] Mini Budget-induced LDI crisis was ‘full scale liquidation event’.
“The unprecedented collateral calls pension funds had to meet for their liability-driven investment portfolios in the wake of last month’s Mini Budget represented a “full scale liquidation event”, the Bank of England has stated… “For the long end of the curve, this is outside of historical experience,” said John Cunliffe.
https://www.investmentweek.co.uk/news/4058470/mini-budget-induced-ldi-crisis-scale-liquidation-event
“[UK] Banks face surge in bad debt as mortgage costs jump £52bn…
“Ed Firth, a banking analyst at Keefe, Bruyette & Woods, said higher rates will push many borrowers into “dangerous territory” …While higher borrowing costs boost banks as they can charge more for lending, they also threaten to drive up defaults as loans become more expensive to pay back and economic activity slows.”
“Britain is hurtling towards a three-day week – and our economy is suffering…
“Rather than stay open, in the impossible economic environment of 2022, Britain’s businesses are increasingly deciding to close: cutting hours, reducing services, or going into winter hibernation. Growth, growth, growth? No, the country’s shrinking.”
“Pharmacists warn of ‘critical’ medicine supply shortages in Northern Ireland amid rising costs.
“Community pharmacists have warned that they need an immediate “cash injection” to stop supplies of some prescription medicines from running out in a matter of weeks. They say commonly prescribed drugs used to treat osteoporosis, high blood pressure, insomnia, mental health and coronary conditions are among those impacted.”
“One in seven people in the UK are skipping meals or going without food, according to new polling data released by the Trades Union Congress…
“With inflation running at 10.1%, the polling found that one in seven people are skipping meals but that rises to one in five people in nearly 50 constituencies across the country… The TUC says the findings on the cost of living are a “stark reminder” of the pressures facing households throughout the UK.”
“The BBC has prepared secret scripts that could be read on air if energy shortages cause blackouts or the loss of gas supplies this winter.
“The scripts, seen by the Guardian, set out how the corporation would reassure the public in the event that a “major loss of power” causes mobile phone networks, internet access, banking systems or traffic lights to fail across England, Wales and Scotland.”
“Estonia turns back to shale oil as it cuts off Russian power.
“When Baltic states switched off Russian power and halted other imports in response to Moscow’s invasion of Ukraine, Estonia restarted its shale oil power plants and set back its efforts to phase out heavily polluting fuels.”
“As Germany faces a growing energy crisis, Aldi Nord, one of the country’s leading retailers, has announced it will start closing its stores earlier in the evenings.
“Operating hours of “numerous stores” would be adjusted, the company said on Twitter… Aldi Nord is not the only company in Germany to impose restrictions in the wake of the energy crisis.”
“Strikes at French nuclear plants – what’s at stake?
“…France’s nuclear output was already expected to hit a 30-year low in 2022 due to a record number of reactor outages for corrosion issues and planned maintenance, at a time when Europe is facing an energy crisis because of the war in Ukraine. Rolling strikes over wages by the FNME-CGT union at some plants have added to the problem.”
https://www.reuters.com/business/energy/strikes-french-nuclear-plants-whats-stake-2022-10-19/
“France braces for more fuel shortages as union votes to extend strikes.
“The French president, Emmanuel Macron, is facing the biggest challenge of his second term as long-running oil depot and refinery blockades create fuel shortages, transport workers join the strike for higher wages and the government prepares to force its budget through parliament without a vote, unable to find a compromise with the opposition.”
“Europe’s Diesel Stockpiles Set to Hit Record Low Without Russia…
“Yet while Europe’s diesel supply faces major disruption through the loss of Russian barrels, demand too could soon be pressured. Last month, the World Bank warned of a looming global recession, something that would likely take a big bite out of the world’s diesel consumption, potentially easing strained stockpiles.”
“Will the energy crisis crush European industry? While companies are digging in for a long winter, executives and politicians fear a wave of deindustrialisation…
“Europe’s industrial base employs some 35mn people or roughly 15 per cent of the working population. The bloc’s leading industrialists warned earlier this month about the potentially devastating economic impact of the energy crisis.”
https://www.ft.com/content/75ed449d-e9fd-41de-96bd-c92d316651da
“Chinese Steel Manufacturers on the Brink of Bankruptcy… High energy costs and falling steel prices are eroding manufacturers’ profitability…
“China finds itself in a precarious place financially. What’s more, a sizable section of global financial and stock analysts have predicted the crises will only get worse as the country prepares to face its toughest winter yet.”
https://oilprice.com/Metals/Commodities/Chinese-Steel-Manufacturers-On-The-Brink-Of-Bankruptcy.html
“Beijing steps up Covid measures as cases quadruple during key CCP congress meeting.
“China’s capital, Beijing, has dialled up measures to stop Covid, strengthening public checks and locking down some residential compounds after a quadrupling of its cases in recent weeks, just as a key Communist party congress entered full swing.”
“China’s Junk Debt Is Sliding Deeper into Unprecedented Distress.
“A worsening crisis in China’s property market is dragging junk dollar bonds from the nation’s borrowers deeper into distress, as the implosion of what was once one of the world’s most-profitable bond trades sends ripples across trading floors.”
https://uk.finance.yahoo.com/news/chinese-junk-bonds-set-record-003127896.html
“South Africa’s Likely in Technical Recession, Citi Says.
“South Africa’s economy is likely in a technical recession as intensified power cuts and heightened uncertainty caused by Russia’s war with Ukraine rippled through global financial markets.”
“Clashes in Chile mark third anniversary of 2019 protests.
“In the capital Santiago on Tuesday, peaceful protesters gathered around the city to remember the victims. In other parts, police responded with tear gas and water cannon when hooded protesters lit fires and threw rocks, including in the area surrounding Plaza Baquedano, the epicentre of the 2019 protests.”
https://www.aljazeera.com/gallery/2022/10/19/clashes-in-chile-mark-third-anniversary-of-riots
“Protests paralyse Tunisian town after migrant deaths…
“”Today the state continues to ignore us and does not even search for those drowned,” said Salim Zreidat, whose 15-year-old son Walid was among the missing. “What has the state done for us to stop our children running? Is there employment? Nothing,” he said, adding that Walid felt he had no future in Tunisia despite being an excellent student.”
“Lebanon has warned that a deadly cholera outbreak is “spreading rapidly”, with cases rising after the virulent disease spread from neighbouring Syria.
“The outbreak in the economically devastated country, which has left at least five dead, is the first since 1993. Health officials have blamed the country’s financial and political struggles, which have left citizens with poor and crumbling sanitation infrastructure.”
https://www.aljazeera.com/news/2022/10/19/lebanon-warns-deadly-cholera-outbreak-spreading-rapidly
“Countries battling deadly cholera outbreaks have been told to ration vaccines amid a global shortage of jabs.
“The World Health Organization called the deviation from the approved two-dose vaccine regime an “exceptional decision” which “reflects the grave state of the cholera vaccine stockpile”. It is the first time this advice has been issued by the International Coordinating Group, which manages emergency supplies of cholera shots.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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