Daily updates on climate change and the global economy.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

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FX swap debt a $80 trillion ‘blind spot’ global regulator says.

“Pension funds and other ‘non-bank’ financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said…

“FX swap markets, where for example a Dutch pension fund or Japanese insurer borrows dollars and lends euro or yen before later repaying them, have a history of problems…

“For both non-U.S. banks and non-U.S. ‘non-banks’ such as pension funds, dollar obligations from FX swaps are now double their on-balance sheet dollar debt, it estimated.”

https://www.reuters.com/markets/currencies/global-markets-bis-urgent-2022-12-05/


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It’s the $65 Trillion in Debt You Can’t Find That’ll Get You…

This debt is not recorded on balance sheets due to accounting conventions for derivatives. These allow banks, pension funds, insurers and so on to book only their net exposure.

https://www.washingtonpost.com/business/its-the-65-trillion-in-debt-you-cant-find-thatll-get-you/2022/12/05/92560836-749d-11ed-a199-927b334b939f_story.html


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Financial instability: the hunt for the next market fracture… central banks are facing a reckoning…

“Soaring inflation is being met by rising interest rates, the slowing of central bank asset purchases and fiscal shocks, all of which are sucking liquidity, the ability to transact without dramatically moving prices, out of markets. Violent, sudden price moves in one market can provoke a vicious loop of margin calls and forced sales of other assets, with unpredictable results.”

https://www.ft.com/content/7f651e23-d545-404f-a137-4f92b6486870


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Banks in countries such as Ukraine and Turkey face a “very high” risk from restrictions on capital flows, weak international reserves and a high level of foreign currency debt, Moody’s Investors Service said in a report on Monday.

“Belarus, El Salvador, Nigeria, Kyrgyzstan and Tajikistan complete the list of countries also exposed to high levels of dollar deposits, according to the report that covers 39 banking systems in emerging market economies…”

https://www.reuters.com/markets/currencies/moodys-sees-very-high-foreign-exchange-risk-banks-ukraine-turkey-2022-12-05/


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World Growth Forecasts Cut Again as Inflation Fight Intensifies.

“World GDP forecasts for 2023 have been revised down again as central banks intensify their fight against inflation and the outlook for China’s property market deteriorates, says Fitch Ratings in its latest report published today. Fitch now expects world GDP to grow by 1.4% in 2023, revised down from 1.7% [again, sub-2.5% or thereabouts = recession for the global economy as a totality].”

https://www.fitchratings.com/research/sovereigns/world-growth-forecasts-cut-again-as-inflation-fight-intensifies-05-12-2022


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The West’s oil war with Russia gets real… On Monday, a ban on the import of seaborne Russian crude oil comes into force…

“Even if the world gets through the coming weeks without major volatility on oil markets, the EU’s next big sanctions blast could deliver a significant shock — both for Europe’s energy supply and for global prices. The EU ban on “refined petroleum products [diesel!]” from Russia, coming into force on February 5, 2023, is “the most important one…””

https://www.politico.eu/article/west-oil-war-russia-sanctions-oil-price-cap-g7-vladimir-putin-zelensky-opec-war-ukraine/


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Oil tanker jam forms off Turkey after start of Russian oil cap; Vessels mass in Turkish waters after Ankara demands confirmation of insurance cover…

“Russia has assembled a so-called “shadow fleet” of more than 100 tankers to try to circumvent western restrictions on its oil exports, which may operate either without insurance or from providers outside the west.”

https://www.ft.com/content/d08d8583-cf2a-43e6-b262-d8eab81c98c8


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Container shipping rates still sinking, no sign yet of market floor.

““This cliff that rates have fallen from shows there is more competition in the market than a lot of people had feared,” said Patrik Berglund, CEO of rate-tracking company Xeneta… Lars Jensen, CEO of consultancy Vespucci Maritime, commented on recent spot-rate action in an online post: “We are coming out of the tunnel, only to discover that the bridge we are driving onto has collapsed.”

https://www.hellenicshippingnews.com/container-shipping-rates-still-sinking-no-sign-yet-of-market-floor/


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Manufacturing orders from China down 40% in unrelenting demand collapse.

“U.S. manufacturing orders in China are down 40 percent, according to the latest CNBC Supply Chain Heat Map data. As a result of the decrease in orders, Worldwide Logistics tells CNBC it is expecting Chinese factories to shut down two weeks earlier than usual for the Chinese Lunar New Year…”

https://www.cnbc.com/2022/12/04/manufacturing-orders-from-china-down-40percent-in-demand-collapse.html


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Not Just the Housing Market: Recession Threatens ‘Unprecedented’ Manufacturing Slowdown Dragging into Next Year [US]…

“Growing evidence emerged this week that the Federal Reserve’s interest rate hikes, which have already caused a sudden collapse in the formerly red-hot housing market, have fueled an unprecedented slowdown for manufacturers—setting the stage for what could lead to a prolonged downturn in industrial production.”

https://www.forbes.com/sites/jonathanponciano/2022/12/02/housing-market-recession-manufacturing/?sh=7ed90405566d


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‘A new level of threat’: Two power stations shot at in the US, leaving thousands without electricity.

“The FBI has been called in after two power stations in North Carolina were shot at, leaving tens of thousands of people without electricity… A state of emergency has been declared and schools will be closed for a second day in a row on Tuesday.”

https://www.msn.com/en-gb/news/world/a-new-level-of-threat-two-power-stations-shot-at-in-the-us-leaving-thousands-without-electricity/ar-AA14Xdbg


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Britain risking ‘a lost decade of growth’ as stagflation takes hold: Business leaders warn action is needed as forecasts are downgraded.

“Business leaders have warned action is needed to avoid a ‘lost decade of growth’ as forecasts were sharply downgraded. The Confederation of British Industry (CBI) estimates Britain’s gross domestic product will shrink by 0.4 per cent next year, down from predictions of 1 per cent growth.”

https://www.thisismoney.co.uk/money/markets/article-11500857/Britain-risking-lost-decade-growth-stagflation-takes-hold.html


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‘For some it’s feed your kids or your dog’: Britons turn to pet food banks.

“Richard Croft had never struggled to feed his three German shepherds before, but when he was forced to stop working after being diagnosed with cancer, their monthly food bill was difficult to keep up with.”

https://www.theguardian.com/society/2022/dec/04/pet-food-banks-cost-of-living-crisis


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Britain is running low on antibiotics just as the country deals with a Strep A outbreak that has killed seven children so far.

“Three drugs routinely used to fight off the bug — or tell-tale symptoms that might be caused by other bacterial infections — are listed as being in short supply.”

https://www.dailymail.co.uk/news/article-11503949/UK-faces-penicillin-shortages-end-December-amid-Strep-outbreak.html


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The Worst of Europe’s Energy Crisis Isn’t Over…

“The problem is, energy markets are so tight that only a few degrees Celsius, or a few windless days, are what separate Europe facing blackouts from having enough power to make it through the winter. And although gas has been emblematic of the energy crisis since Russia cut supplies, I remain more worried about electricity.”

https://www.bloomberg.com/opinion/articles/2022-12-05/the-worst-of-europe-s-energy-crisis-isn-t-over-electricity-blackouts-loom


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Advice for Europeans: Bundle Up and Get Ready for Outages.

“Life in some European cities may soon look like this: Staggered electricity outages to save energy. Temporary cuts in mobile phone and internet service. Schools closed for a lack of lighting and heat. Even traffic lights could briefly be powered down.”

https://www.nytimes.com/2022/12/05/business/europe-france-power-outages.html


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Europe urgently needs a new industrial master plan…

The inconvenient truth is that, for decades, the business model of many European industries was based on the availability of abundant and cheap supplies of Russian energy. That business model was shattered when Russia invaded Ukraine. And it’s not coming back.”

https://www.ft.com/content/2a68ef41-76ee-4406-a1f1-b64b2efc58a0


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Hungarian oil and gas group MOL said on Monday it faced a partial shortage of fuel stocks across almost its entire network of filling stations over the weekend as many people started stockpiling.

“Late last month MOL said it was temporarily curbing fuel deliveries to some retailers in Hungary as oil supplies from Russia fell below normal levels on the Druzhba pipeline. Maintenance at its main Danube refinery had caused a drop in capacity…”

https://www.reuters.com/business/energy/hungary-mol-says-fuel-shortage-mainly-due-lack-imports-2022-12-05/


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Thousands of Italians have held protests against high cost of living and energy prices, and called for suspension of shipment of weapons and money to Ukraine.

“The protests, organized by the USB (Unione Sindacale di Base) union with the support of political parties and different social organizations, were held in the capital city of Rome on Saturday.”

https://www.presstv.ir/Detail/2022/12/04/693878/Italian-protest-against-high-cost-living-supporting-Ukraine-war


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Fuel runs dry at South Korean petrol stations as truckers strike.

“A nationwide strike by South Korean truckers has led nearly 100 petrol stations across the country to run dry, government data show, as a national trade union announced it would launch a general strike in support of the drivers.”

https://www.aljazeera.com/economy/2022/12/6/fuel-runs-dry-at-south-korean-petrol-stations-as-truckers-strike


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Stock feed prices are rising as widespread floods take out key fodder-growing regions in eastern Australia, causing an increase in farming costs that will be passed on to consumers.

“According to Dairy Australia, wet weather has hindered usual hay, silage and grain production, with harvesting and processing delayed as fields dry out – if the crop hasn’t been destroyed entirely.”

https://www.theguardian.com/australia-news/2022/dec/06/hay-shortages-and-price-rises-expected-after-flooding-wipes-out-growing-regions


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Australian contractor Clough’s collapse leaves more than $8 bln in projects in limbo.

More than $8 billion worth of gas, power, rail and mining projects across Australia, Mongolia and Papua New Guinea face delays following the collapse of engineering firm Clough on Monday. Projects that could be hit include the expansion of the Oyu Tolgoi copper mine in Mongolia…”

https://www.reuters.com/business/energy/australian-gas-power-projects-hit-by-collapse-contractor-clough-2022-12-06/


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Mongolians attempt to storm Government Palace as protests over coal profits scandal swell.

“For Mongolian youth, word of a scandal in which officials are said to have embezzled state coal export profits was the straw that broke the camel’s back on December 5 as hundreds assembled for an Ulaanbaatar demonstration that saw a minority attempt to storm Government Palace, breaking windows and tearing down perimeter fences in the process.”

https://www.intellinews.com/mongolians-attempt-to-storm-government-palace-as-protests-over-coal-profits-scandal-swell-264364/?source=mongolia


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Winter Tests Central Asia’s Decrepit Energy Systems, People’s Patience.

“People shiver inside their homes after a power-plant failure in Kazakhstan. A village in Tajikistan can’t pump water due to blackouts. Streetlight are used in a “restricted” capacity in the Uzbek capital, Tashkent. Not for the first time, the cold season is throwing Central Asia’s energy shortages into sharp relief…”

https://www.rferl.org/a/central-asia-energy-emergency/32160389.html


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Kerala [India] facing ‘unprecedented financial crisis’, says Finance Minister.

“Kerala Finance Minister K N Balagopal on Tuesday said the state is reeling under unprecedented financial crisis and attributed the ”distorted” financial policies of the Centre, the outbreak of COVID-19 pandemic and recurring natural disasters as reason for the poor economic condition.”

https://www.devdiscourse.com/article/law-order/2276673-kerala-facing-unprecedented-financial-crisis-says-finance-minister


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‘Pakistan in financial emergency’.

“The consistent depreciation of the rupee is deepening the economic crisis in the country said the Pakistan Business Forum (PBF), as its leaders called upon the State Bank of Pakistan (SBP) to take necessary measures to stop market speculation and resolve the issue.”

https://tribune.com.pk/story/2389724/pakistan-in-financial-emergency


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Lebanon’s inflation rate increased 186.4% in the first 10 months of 2022.

“Hyperinflation in Lebanon continued for the 28th consecutive month in October, with the Central Administration of Statistics’ Consumer Price Index increasing by 186.4 per cent… The country is in the grip of an economic crisis described by the World Bank as one of the worst in modern history…”

https://www.thenationalnews.com/business/economy/2022/12/04/lebanons-inflation-rate-increased-1864-in-the-first-10-months-of-2022/


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A protester and a policeman have reportedly been killed during rare demonstrations in the southern Syrian city of Suweida.

“Crowds angry because of the worsening economic conditions in Syria stormed the governor’s office. Eyewitnesses say the protesters set fire to the building amid exchanges of gunfire in the Druze-majority city.”

https://www.bbc.co.uk/news/world-middle-east-63852389


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Tunisians dream of moving to Germany as crisis bites.

“Germany is becoming a key destination for disillusioned young Tunisians despite a language barrier and the North African nation’s long history of ties with France. Europe’s biggest economy, with its low birth rate, is crying out for labour…”

https://uk.finance.yahoo.com/news/tunisians-dream-moving-germany-crisis-031415777.html


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Thousands of protesters marched in Morocco’s capital Rabat on Sunday decrying the “high cost of living and repression,” amid surging inflation and rising social discontent.

“The people want lower prices… The people want to eliminate despotism and corruption,” chanted the crowd…”

https://english.alarabiya.net/News/middle-east/2022/12/05/Thousands-protest-in-Morocco-over-price-hikes-repression-


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Prices soar as fuel shortage in Sierra Leone continues to bite…

“It is not only motorists and the economy that are taking a knock. Kamara says the cost of fuel is so high, he has to increase the price for his passengers… In August, at least 25 people died in the capital Freetown when protests against fuel and food prices turned violent.

https://www.euronews.com/2022/12/05/prices-soar-as-fuel-shortage-in-sierra-leone-continues-to-bite


You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.

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