“Shipping giant Maersk warns of ‘dark clouds on the horizon’.
“The spike in shipping rates since the onset of the pandemic has been a huge boon for Maersk. But the Danish shipping giant is warning its business will have to endure tougher times soon.
“The company said Wednesday that a looming global recession is expected to reduce container demand by between 2% and 4% in 2022, with “plenty of dark clouds on the horizon.””
https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html
“Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said on Tuesday…
“Gold is typically seen as a safe asset for times of uncertainty or turmoil…”
“Globalisation might end in a world conflict.
“How might globalisation end? Some seem to imagine a relatively peaceful “decoupling” of economies until recently stitched so tightly together. But it is likely that the fracturing of economic ties will be both consequence and cause of deepening global discord. If so, a more destructive end to globalisation is likely…
“A breakdown of co-operative relations is likely to end whatever chance exists of avoiding a runaway process of climate change.”
https://www.ft.com/content/8954a5f8-8f03-4044-8401-f1efefe9791b
“Dozens of US Coal Plant Closures Delayed as Green Energy Shift Slows.
“As many as 40 US coal-fired power plants that were slated to shut will run for longer than expected, with operators delaying plans to retire them as supply-chain issues and reliability concerns slow the transition to greener energy… The delays reveal headwinds for a large-scale shift to cleaner energy…”
“US rates hit 4pc as Fed warns of more rises to come.
“The Fed has said that “ongoing increases” in interest rates will likely be needed after it raised interest rates by 75 basis points to between 3.75pc to 4pc. The latest move – its fourth straight increase at this level – means US rates have hit a fresh high since 2008 as policymakers make their latest bid to tame inflation.”
“There is wide agreement among economists and market observers that the Federal Reserve’s aggressive interest rate hikes will cause economic growth to grind to a halt, leading to a recession. Less talked about is the risk of a financial crisis as the U.S. central bank simultaneously tries to shrink its massive balance sheet…
“Given the sheer size of the Treasury market, problems there are likely to leak into virtually every other market in the world.”
https://news.yahoo.com/fed-faces-twin-threats-recession-231215497.html
“Can the Fed fight inflation without triggering a meltdown?
“…The reality is that the shadow banking system is now so big and so opaque, the trades and instruments so complex and intertwined, and the players so herd-like in their behavior that any dramatic move in the price of one security, one commodity, one currency — or the collapse of one player — can trigger a chain reaction that ultimately could crash the entire system.”
https://www.washingtonpost.com/us-policy/2022/11/02/federal-reserve-financial-crisis/
“Risk of global financial crisis spiking… Unfortunately, a by-product of this bold strategy [by the Fed] will likely be a sharp contraction of the global economy in the first half of 2023…
“This “almost certain” global economic slowdown could signal a death blow for the already ailing world financial system, which is loaded with problems and on the brink of going under. We could see the collapse of commercial and investment banks, which could trigger a financial crisis similar to the Great Depression of the 1930s or the subprime debt crisis of 2008.”
https://www.bangkokpost.com/opinion/opinion/2428665/risk-of-global-financial-crisis-spiking
“Cash-strapped Canadians have run their credit card debt up to a record high: Equifax.
“Equifax Canada’s consumer survey out today found that the average credit card balance has now reached a record high of $2,121… The total average non-mortgage debt is $21,188, a high not seen since the first quarter of 2020.”
https://financialpost.com/executive/executive-summary/credit-card-debt-inflation-equifax
“UK food prices soar by fastest rate on record as cost of living crisis bites.
“UK food price inflation soared to a record annual rate of 11.6% in October as staples such as teabags, milk and sugar became more expensive along with fresh food, data shows… There is little hope that food price inflation will ease off soon, warned Andy Clarke, the former chief executive of the supermarket chain Asda.”
“UK manufacturing faces deep recession as output slumps… Factory output was hit especially hard by a drop in new orders amid a global fall in the demand for industrial goods.
“The S&P Global/CIPS UK Manufacturing PMI, a measure of activity across the sector, scored 46.2 in October, down from 48.4 in September to hit a 29-month low. A figure below 50 signals that the sector is shrinking.”
“UK Government tests energy blackout emergency plans as supply fears grow…
“The Guardian has seen documents, marked “official sensitive”, which warn that in a “reasonable worst-case scenario” all sectors including transport, food and water supply, communications and energy could be “severely disrupted” for up to a week.”
“Bank of England begins selling bonds as it unwinds QE programme.
“The Bank of England has become the first major central bank to sell bonds back to financial markets, as it presses ahead with plans to unwind the quantitative easing programme, through which it holds almost £850bn of gilts.”
https://www.ft.com/content/64e5dcdd-42a8-4013-a3bd-75a62cf8e6dc
“Moody’s cuts outlook for European banks, including Germany’s, on credit woes.
“Global credit ratings agency Moody’s downgraded its outlook for banks in Germany, Italy and four other countries to “negative” from “stable” on Wednesday as Europe’s energy crisis and high inflation weaken its economies.”
“Credit Suisse Cut to One Level Above Junk Status by S&P…
“The US ratings firm, echoing several analysts after the restructuring was announced on Thursday, said it sees “material execution risks amid a deteriorating and volatile economic and market environment.” It also signaled that some details around asset sales remain “unclear.””
“Europe’s next debt crisis is only just beginning – tearing North and South apart…
“The eurozone credit crunch has begun in earnest. Lending conditions across the currency bloc are the tightest since late 2012, when the region was still crippled by the sovereign debt crisis. The European Central Bank’s lending survey (BLS) is a leading indicator of what is to come. Both the supply and demand for credit definitively buckled in the third quarter…”
“Energy crisis chips away at Europe’s industrial might.
“…demand for natural gas and electricity both fell in the past quarter. It is far too early to rejoice, though. The drop is not just because industrial companies are turning down thermostats, they are also shutting down plants that may never reopen… For example, EU primary aluminium output was halved, cut by 1 million tonnes, over the past year.”
“Europe sinks deeper into stagflation.
“Economic activity in the eurozone has been battered by soaring inflation which has forced households to cut back on spending. At the same time, the steep rise in energy costs has forced manufacturers to either scale back or shutter production.”
“Russia’s economy shrank by 5% on an annualised basis in September, the economy ministry said on Thursday, a sharper contraction than the 4% recorded a month earlier.
“Western sanctions and the fallout from Russia sending tens of thousands of troops into Ukraine in February have pushed the country into recession, but Moscow says the West has failed to destroy the Russian economy.”
“One in four Australians struggling to make ends meet as inflation strains incomes, study shows…
“Those are the findings of an Australian National University survey of almost 3,500 adults that confirms inflation is harming Australians’ economic wellbeing, with many registering a real pay cut despite working more hours.”
“Sharp Yen Swing Has Traders on Watch for Post-Fed Japan Reaction…
“Officials have repeatedly said they will step in to counter one-sided yen weakness, although some analysts warn that any intervention will have a limited impact as long as the policy gap between the Bank of Japan and peer central banks remain. The BOJ stood by its ultra-low interest rate policy last month.”
“Korea Credit Crisis Spreads as Bond Uncalled in First Since 2009.
“A South Korean insurer took the unusual step of delaying buying back perpetual bonds, in the first such case for the nation’s issuers since 2009 that adds to signs of a crisis in the local credit market… Korea has been scrambling to prevent a credit market meltdown from sparking broader contagion…”
“China Tells Officials to ‘Resolutely Adhere’ to Covid Zero.
“China’s top health body said the nation’s zero-tolerance approach remains the overall strategy to fighting Covid-19 after unverified social media posts buoyed hopes the policy would be eased… lockdowns, mass testing and centralized quarantine in China show no sign of slowing. Zhengzhou’s Airport Economy Zone, the district where the world’s largest iPhone factory is located, was shut down yesterday for seven days.”
“Bolivian President warns of unrest as right-wing demands early census.
“”The Bolivian President Luis Arce warned on Tuesday that far-right conservative politicians who seek to repeat a coup d’état are fomenting violence in Santa Cruz’s civic strike. “Today, Bolivia is once again threatened by those who, unable to contribute to democracy, bet on confrontation and violence,” he denounced.”
“Brazil Protests Hamper Shipments of Food, Fuel, Fertilizer…
“Truck drivers have led protests by backers of incumbent president Jair Bolsonaro following his defeat in Sunday’s election to Luiz Inacio Lula da Silva. Protests that have spread across the country are a consequence of dissatisfaction with the election, Bolsonaro said in his first speech after the ballot outcome.”
“IMF Cash for Chad on Hold as Creditors Refuse Debt Relief.
“The International Monetary Fund can’t disburse more money to Chad under an agreed $570.8 million bailout unless reluctant creditors agree to revamp part of the nation’s debt, the deputy head of its Africa Department said.”
“Mining giant Glencore flew cash bribes to Africa via private jet, UK court hears…
“The court heard detailed descriptions of how Glencore and its agents repeatedly sought to corrupt public officials. On one occasion, an agent told Glencore to hurry cash payments because he had “staff to make happy before Christmas” – a reference to a bribe in Nigeria.”
“Iran’s Currency Hits New Low Against the Dollar Amid Unrest.
“Iran’s currency dropped to its lowest value against the dollar on Tuesday, after weeks of nationwide unrest roiling the country. A stalemate in negotiations to revive Tehran’s nuclear deal with world powers has also weighed heavily on the rial.”
https://www.arabnews.com/node/2192126/middle-east
“Hundreds march in crisis-hit Sri Lanka protesting tax hikes, crackdowns.
“Hundreds of people marched in Sri Lanka’s largest city Colombo on Wednesday protesting against higher taxes, inflation and alleged state-led repression as the country struggles to emerge from its worst financial crisis in seven decades.”
https://news.yahoo.com/hundreds-march-crisis-hit-sri-133646212.html
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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