“Money supply growth fell again in November, and this time, it turned negative for the first time in 33 years…
“It should be emphasized that it is not necessary for money supply growth to turn negative in order to trigger recession, defaults, and other economic disruptions.
“With decades marked by the Greenspan put, financial repression, and other forms of easy money, the Federal Reserve has inflated a number of bubbles and zombie enterprises that now rely on nearly constant infusions of new money to stay afloat.
“For many of these bubble industries, all that is necessary is a slowing in money supply growth, brought on by rising interest rates or a confidence crisis.”
https://seekingalpha.com/article/4567446-money-supply-growth-turns-negative-first-time-in-33-years
“Defaults on US junk loans expected to climb as rate rises squeeze earnings…
“Deutsche Bank expects the default rate on leveraged loans in the US to climb to 5.6 per cent next year — up from 1.6 per cent — before rising to 11.3 per cent in 2024. That would leave defaults close to all-time highs set in 2009. Strategists at UBS forecast a default rate for low-grade loans of 9 per cent in 2023 alone.”
https://www.ft.com/content/82d13161-f7b2-4dbc-acac-93c619a947c5
“It may be one of the most anticipated recessions of all time, but that doesn’t mean it won’t hurt.
“Barclays Capital Inc. says 2023 will go down as one of the worst for the world economy in four decades. Ned Davis Research Inc. puts the odds of a severe global downturn at 65%. Fidelity International reckons a hard landing looks unavoidable.”
https://www.bloomberg.com/graphics/2023-investment-outlooks
“Third of world economy to hit recession in 2023, IMF head warns…
“The new year is going to be “tougher than the year we leave behind,” IMF managing director Kristalina Georgieva said on the CBS Sunday morning news program Face the Nation on Sunday. “Why? Because the three big economies – the US, EU and China – are all slowing down simultaneously,” she said.”
“UK faces worst and longest recession in G7, say economists.
“A clear majority of the 101 respondents in the FT’s annual poll of leading UK-based economists said the inflationary shock caused by the pandemic and the Ukraine war would persist for longer in the UK than elsewhere, forcing the Bank of England to keep interest rates high and the government to run a tight fiscal policy.”
https://www.ft.com/content/81fbdff6-dacb-476b-a4ba-12696e7f7800
“UK firms less likely to borrow than at any time since financial crash…
“The quarterly survey by the accountancy firm Deloitte found CFOs now more reluctant to borrow from banks or issue debt than they had been since 2008. With the Bank of England having raised interest rates to 3.5%, about 70% of those questioned now rate credit as costly, and almost half said that new credit was hard to get.”
“Sweden swept by ‘major bankruptcy wave’ amid inflation, energy crisis.
“The Nordic country is entering a long-term recession that is expected to last until 2025, with shrinking GDP and rising unemployment, according to the Swedish government. According to the business and credit reference agency UC, the number of bankruptcies in Sweden reached a decade high in the second half of 2022.”
“The Ministry of Finance says the Finnish economy will slide into a recession in early 2023.
“The Ministry of Finance presented its latest economic forecast last month, revealing that it expects the gross domestic product to contract by 0.2 per cent in 2023 before growing by 1.2 per cent in 2024 and 1.4 per cent in 2025.”
“Italy is the eurozone country most susceptible to a debt crisis as the European Central Bank raises interest rates and buys fewer bonds in the coming months, economists say.
“Nine out of 10 economists in a Financial Times poll identified Italy as the eurozone country “most at risk of an uncorrelated sell-off in its government bond markets”.”
https://www.ft.com/content/10e31210-e750-4f53-b697-2079f2a139b5
“Hong Kong home sales drop to lowest level since 2008 financial crisis.
“Hong Kong home sales have fallen 40 per cent year-on-year to their lowest level since the 2008 global financial crisis, data from the local land registry and projections from real estate agencies have shown.”
https://www.ft.com/content/9c595e08-fa26-453c-a91b-ee9412f741ce
“Don’t expect Asia to save the global economy in 2023.
“…much of the inflation that energy and food subsidies have managed to mitigate in 2022 might appear in 2023 as Asian economies can no longer put up with the fiscal cost of such subsidies… All in all, Southeast Asian economies, as well as India, are expected to decelerate in 2023…”
https://asiatimes.com/2023/01/dont-expect-asia-to-save-the-global-economy-in-2023/
“Sri Lanka’s cancer patients struggle amid the country’s economic chaos.
“Hospitals countrywide have struggled to contend with severe drug shortages, which have worsened over the last eight months, a representative of Sri Lanka’s largest doctors union told Reuters… Specialist facilities like cancer and eye hospitals are running on donations, Dr Ratnasingam said.”
“Reeling under Chinese debt and rocked by an unstable law and order situation, Pakistan is on the verge of bankruptcy. Most government departments in Pakistan are facing a severe cash crush and the condition of Pakistan Railways is no different.
“Pakistan Railways is currently in a lot of trouble as it has only three days of fuel reserves left.”
“Pakistan is facing a crippling gas crisis this winter, with the nation resorting to rationing fuel.
“Videos shared on social media claim that people have been filling balloons with cooking gas to use later. While Firstpost cannot confirm the veracity of such videos but they emerge amid reports of shopkeepers in the country illegally selling locally manufactured plastic bags filled with cooking gas.”
“Protesters in Tehran’s bazaar have chanted slogans denouncing the regime amid tight security measures on the 107th day of public protests in Iran.
“Online account “1,500 Tasvir,” which closely follows the Iranian protests, published a video showing a state of panic in the bazaar and chants of “death to the dictator” and “poverty, corruption, and high prices will overthrow the regime.””
https://english.aawsat.com/home/article/4074301/protests-erupt-tehrans-bazaar
“Impact of Iraq protests on the oil sector of Iraq.
“With the ongoing protest and the history of the country there exists many problems for new businesses. With rampant corruption and militancy, the protest only further makes it difficult for new and existing businesses to function. Since the country on an average only gets 6 hours of electricity a day most businesses cannot function.”
https://moderndiplomacy.eu/2023/01/01/impact-of-iraq-protests-on-the-oil-sector-of-iraq/
“Syria weakened its official exchange rate to 4,522 Syrian pounds to the dollar…
“An economic crisis in the country has been triggered by years of conflict, Western sanctions, a currency squeeze in part due to a financial meltdown in neighboring Lebanon and the government’s loss of its northeastern oil-producing territories.”
https://english.alarabiya.net/business/economy/2023/01/02/Syria-weakens-official-exchange-rate
“What’s driving Jordan’s fuel protests?
“…the demonstrations in Jordan’s south, which have since spread to Kerak, Tafileh, and other areas, reflect the socioeconomic failures of successive governments and have been fueled by public discontent with declining living conditions and a lack of government transparency.”
https://thearabweekly.com/whats-driving-jordans-fuel-protests
“Strike over pay paralyses transport in Tunisian capital.
“Metro and bus traffic in Tunisia’s capital ground to a halt on Monday after employees of state transport company Transtu held a strike over delays in payment of wages and bonuses. The strike in Tunis highlights the financial problems faced by public companies on the verge of bankruptcy…”
“2023: No respite for Nigerians as fuel scarcity, queues persist.
“Early hopes of the current fuel scarcity easing off appear dashed as Nigerians again woke up to the reality of petroleum product shortages in the New Year. Indeed the New Year celebration for most Lagos residents was completely marred by the energy crisis…”
https://www.sunnewsonline.com/2023-no-respite-for-nigerians-as-fuel-scarcity-queues-persist/
“Malawians demonstrated courage, resilience in 2022 – Chakwera.
“During the year, the Chakwera administration failed to take appropriate measures to deal with rising cost of living which was worsened by Chakwera’s decision to devalue the Malawi Kwacha by 25 percent in May. Apart from the increase in prices of goods and services, Malawians also had to deal with forex and fuel shortages as well as 8-hour daily blackouts…”
https://malawi24.com/2023/01/01/malawians-demonstrated-courage-resilience-in-2022-chakwera/
“As rolling blackouts worsen, South Africans are turning to social media to voice their fears over the growing risk of food poisoning.
“Foods that require refrigeration like meat, seafood and dairy are the biggest worries as power cuts jeopardise the safety of perishables.”
“Bolivia farm region blocks borders, grain transport as protests lead to clashes.
“Protesters in Bolivia’s farming region of Santa Cruz are blocking highways out of the province, threatening to snarl the domestic transport of grains and food, as anger simmers following the arrest of local governor Luis Camacho.”
“UN warns Haiti ‘on verge of abyss’…
“”It’s hard to overstate the extent to which the security situation in Haiti collapsed in 2022,” said the UN in its review of 2022, noting that “practically nowhere in the capital, Port-au-Prince, could be deemed safe, as rival gangs fought over territory, terrorising increasingly desperate citizens, already struggling to survive a humanitarian catastrophe”.”
https://www.jamaicaobserver.com/news/un-warns-haiti-on-verge-of-abyss-2/
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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