Financial time bomb: The risks of climate inaction to the global economy“
“The world is facing a financial time bomb due to economic risks from climate change. Climate change is causing billions in losses globally and affecting the economy. Transitioning to a low-carbon economy is necessary to reduce emissions, but difficult for financial institutions. An abrupt market sell-off could trigger a financial crisis.”
On climate, most corporations more talk than action.“
“The world’s biggest and richest companies are failing to deliver on their climate pledges, according to an in-depth analysis released Monday that calls on governments to crack down on corporate greenwashing.”
50% of the global economy is under threat from biodiversity loss.“
“Whether you live in a city, a rural area or by the ocean, it’s likely you have noticed a decline in biodiversity. Maybe fewer birds visit your urban feeders, larger mammals are less common in the fields and forests around you, or your catches on those fishing trips are getting smaller. What we’re all witnessing is a potentially catastrophic loss of biodiversity on which entire ecosystems depend.”
The metric that shows why the world’s three biggest economies could be in serious trouble.“
“The dependency ratio [ie the comparison of a working-aged population to the young and elderly among them] might be one of the most important statistics when it comes to the future of investing and global markets. For the United States., China and Japan, it’s headed in the wrong direction.”
A Yale University professor has sparked outrage by suggesting the only way to deal with Japan’s rapidly aging population is a mass suicide and disembowelment.“
“Yusuke Narita, an assistant professor of economics at Yale, defended his views… ‘I feel like the only solution is pretty clear,’ he said at the time. ‘In the end, isn’t it mass suicide and mass ‘seppuku’ of the elderly?'”
Chinese pensioners returned to the streets of Wuhan to protest changes to their medical benefits, highlighting the challenge confronting President Xi Jinping’s government following historic anti-lockdown demonstrations in November…“
“In recent months, Chinese citizens have become increasingly bold about protesting government policies.”
The world is counting on an economic bounceback from China to power global growth and help keep recession at bay. Don’t bank on it…“
“China has historically relied on government stimulus and heavy investment to power itself out of slumps. That mix [+ now depleting stores of cheap coal] helped yank the global economy out of the doldrums after the 2008 financial crisis. This time, China is deeply in debt, its housing market is in distress, and much of the infrastructure the country needs is already built.”
Copper [a key barometer of health for the global economy] Prices Flatline As Chinese Demand Struggles To Recover.“
“…the market’s attitude has changed from general optimism to one of “watch and wait.” Most analysts simply keep holding out for signs of a resurgent Chinese demand, which many think may not arrive.”
War in Ukraine at 1 year: Pain, resilience in global economy.“
“One year after Russia invaded Ukraine on Feb. 24, 2022, the global economy is still enduring the consequences — crunched supplies of grain, fertilizer and energy along with more inflation and economic uncertainty in a world already contending with too much of both.”
Get ready for conflict, chaos and instability.“
“It’s time to prepare for the new world order and the stark implications of its arrival… there was always a hope… that the multilateral world order would survive because it was the best; because we designed it; because it conformed to universal notions of freedom and human rights, and because it was good for us. Unfortunately, we have to abandon that hope. It’s the multipolar scenario that is unfolding…”
Most fund selectors believe a recession is needed to reduce global levels of inflation, according to a new survey, amid concerns the economic headwinds of last year will continue in 2023.“
“Research conducted by Natixis Investment Managers, found 62% of fund professionals globally, and 74% in Asia, see a recession as a necessary way out of high inflation.”
Global Liquidity Drain Is Coming for Markets, Citi’s King Says.“
“King pointed to interventions in recent months undertaken by the Bank of Japan and People’s Bank of China — as well as shifting line items on the European Central Bank’s and Federal Reserve’s balance sheets — that have added almost $1 trillion to global central bank reserves… According to King, the $1 trillion increase in reserves helps resolve the disconnect [between stock markets and “real” economies battered by rampant inflation].”
U.S. companies face more pain as expected ‘earnings recession’ looms.“
“Expectations for U.S. earnings to decline in the first and second quarter come amid weaker-than-expected fourth-quarter results for 2022, which Credit Suisse estimates will be the worst earnings season outside of a recession in 24 years.”
UK labour market can’t hold out much longer against impact of stagflation.“
“Britain’s economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture… In fact, the diagnosis is straightforward. There was zero growth in the final three months of 2022 while the annual inflation stood at above 10%.”
More [UK] working days were lost to strike action last year than at any time since 1989, according to official figures that also show wage growth failed to keep pace with inflation amid the biggest real-terms fall on record.“
“The figures from the Office for National Statistics provide more evidence for the squeeze on households amid the cost of living crisis.”
UK and Eurozone inflation likely to remain high for several years due to the energy crisis.“
“The surge in energy prices has significantly lifted headline inflation rates in the UK and Eurozone through the direct impact on household energy bills. However, there is a lag to the feed through from rising energy costs and consumer inflation of several months.”
European countries’ bill to shield households and companies from soaring energy costs has climbed to nearly 800 billion euros, researchers said on Monday.“
“The eye-watering sum has mostly gone towards measures like VAT cuts on petrol and retail power price caps. These act as “de-facto fossil fuel subsidies,” according to the analysis by think-tank Bruegel…”
Europe’s gas stockpiling could cost energy users and taxpayers billions, according to a report by Bloomberg.“
“…much of the commodity was bought at record prices… Since then, however, prices have fallen to their lowest point in 18 months… As a result, any sales of natural gas could cost energy users and taxpayers billions.”
France Leans On Retailers To Help Consumers Cope With Food Prices.“
“France’s finance minister has urged food retailers to do more to help consumers cope with high prices, as the government leans on them to agree to sell an anti-inflation basket of everyday essential goods at knockdown prices.”
Nearly one million French march as pension protests continue.“
“Protesters held a sometimes restive fourth round of nationwide demonstrations across France against President Emmanuel Macron’s plans to reform the country’s pension system. More than 960,000 people marched in Paris, Nice, Marseille, Toulouse, Nantes and other cities…”
With no police to call or courts to turn to, Serbs in northern Kosovo are stuck in the middle of another bout of unrest after a mass walkout triggered new uncertainty amid the unending tug-of-war with Serbia.“
“For three months, residents living in Kosovo’s northern Serb enclaves have gone without basic bureaucratic services — including law enforcement, courts, and local government institutions.”
‘Full-blown crisis’: Karabakh blockade triggers shortages.“
“…around 120,000 residents of Nagorno-Karabakh — Azerbaijan’s Armenian-populated breakaway region — have since mid-December lived under a blockade that led to shortages of food, medicines, and fuel. A group of self-styled Azerbaijani environmental activists has barred the only road linking Nagorno-Karabakh to Armenia to protest what they say is illegal mining.”
Kazakhstan again struggling with power outages.“
“Households and enterprises in seven regions across Kazakhstan were temporarily knocked off the power grid as temperatures dropped to around -14 degrees Celsius over the weekend in fresh evidence of how the country is struggling to cope with inexorably mounting demand for electricity.”
Pakistan edges closer to debt default as inflation, political turmoil and unrest collide.“
“Pakistan’s economy faces total collapse, with a similar pattern emerging to that of its South Asian neighbour, Sri Lanka. Yet, unlike in Sri Lanka, the country is nuclear armed, its leading politicians are engaged in a violent power struggle, while an emboldened Taliban-affiliated terror group lays siege to the country’s west and north.”
Decades of Iraq War Fuel Catastrophic Rise in Antibiotic Resistance.“
“Decades of wars and conflict in Iraq have led to a “catastrophic” rise in antibiotic resistance in the country, with serious implications for the entire region and the world, warn international experts in the open access journal BMJ Global Health.”
Earthquake survivors in Turkey face tragic times with economic collapse.“
“The enormous calamity confronts the two nations that have been equally struggling for some time to overcome massive economic crises and a lingering 12-year civil war in Syria that has made the country a pariah and sent millions of Syrians into exile in Turkey or independent pockets within the country.”
The Lebanese pound on Tuesday sank to a new record low of 74,000 against one U.S. dollar…“
“Lebanese experts have repeatedly urged Lebanese authorities to take quick actions to stop the collapse of the Lebanese pound… Lebanon has been suffering from a steep financial crisis, and the country has so far failed to implement structural reforms to start the recovery process.”
Protests and strikes in Israel as plans for judicial overhaul move forward…“
“Prime minister Benjamin Netanyahu’s judicial changes have been met with some of the biggest protests ever witnessed in Israel in the two months since he returned to office, uniting many elements of what is usually a highly polarised society.”
World Bank Urges Egypt to Loosen State Grip on Economy.“
“Egypt needs to get more transparent about its debt, and that includes amounts owed by state-owned enterprises in an economy where the government plays too large a role, a senior World Bank official said… Last week Moody’s Investors Service downgraded the country’s credit rating deeper into junk territory, citing its declining ability to absorb shocks.”
Tunisia’s president on Tuesday accused some people detained in a wave of recent arrests of being responsible for price increases and food shortages, saying they wanted to fuel a social crisis.“
“President Kais Saied vowed to move forward to “clean the country,” in his first official comments on the arrests made during a meeting with Tunisia’s trade minister.”
Moroccans Overwhelmed by Rising Inflation, Outraged by Unresponsive Government… The situation resulted in protests in several cities, including Tangier and Meknes, among others, over the weekend…“
“In souks, vegetables and fruits are untouchable for low-income people and those who do not have an income at all.”
Nigeria’s naira shortage: Anger and chaos outside banks…“
“People here have long been used to the periodic bouts of fuel shortages leading to long lines of cars snaking from the petrol stations. But now long lines of frustrated, confused and angry people have become a common sight outside banks as the country builds up to a presidential election at the end of the month.”
Fitch Cuts Ghana Local Debt Rating to ‘Restrictive Default’ on Distressed Swap…“
“Fitch also affirmed the nation’s foreign currency rating at C, the lowest score before default. Because a Eurobond coupon payment due last month hasn’t been honored, the agency will cut the foreign-currency grade to ‘RD’ after the grace period expires on Feb. 17, according to the statement.”
Venezuelans say credit cards that were once lifeline now ‘useless’.“
“Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said.”
Protests return to Bogotá [Colombia] streets as tensions rise over health “reform”…“
“As residents of Bogotá face two days of protests, as well as fears that a return to social unrest on the streets of the capital will bring mobility to a standstill, Petro’s call for mobilizations appears to be repeat from his term as Mayor of Bogotá…”
Peru crisis deepens as agreement on early polls eludes lawmakers.“
“Peru’s congress has been unable to set a date for early elections, deepening the political paralysis in the world’s second-biggest copper producer as widespread anti-government protests enter their third month.”
Argentinians drown in spiralling inflation at nearly 100%.“
“Argentina’s inflation rate has hit just shy of 100 percent, the government said on Tuesday, with savers feeling more pain from some of the world’s fastest-rising prices and workers’ budgets straining as costs outstrip salaries.”
Strong dollar fuels wave of emerging market currency devaluations.“
“A recent spate of currency devaluations has highlighted the intense pressure on many emerging economies, as the strength of the US dollar forces them to spend precious foreign reserves supporting their exchange rates.”
Crypto’s free pass is getting yanked as the most powerful US financial regulators rapidly close key doors to the country’s banking system.“
“The increasingly aggressive posture, which has taken shape through public and private actions in the weeks since the collapse of crypto exchange FTX, could push the industry to the fringes of finance.”
Central banks currencies are coming whether we want them or not. Should you be worried about CBDCs?“
“Already, the U.S. is moving forward with tests of CBDCs, the U.K. is hiring a Head of Central Bank Digital Currency and testing out a digital pound, and China has launched its version of CBDCs in the real world.
“We are closer than ever to a world of centralized digital currencies reshaping the financial sector. This raises the question of whether we are entering a new era of financial efficiency or, as critics fear, one of dystopian surveillance.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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Thanks for the interesting choice of articles
A lot is about demographics… too old, too young.
Today I wrote an article on the problmen between Italy and France on the exterme increase of underage ‘ border crossers’ from Italy ? Well Africa of course. Where are they coming from ? Just looked at Mali one of those sub-Saharan countries. France has just withdrawn its troops there, the Wagners are taking over. Surely the average age there is a bit different from Japan, China and the US. The percentage of residents between 0-14 in 2017 was 48.2%, between 15-64 48.8% and 65+ 3%. You won’t get old there!
Well then on your way to Europe! It’s like Little Tom Thumb…just sent away…into the desert look for it. Let’s see how we are going to deal with that problem.
Inflation another theme. France is meddling in it up to even the shopping basket. That has a cause. The yellow shirts now five years ago. Large retail groups and big food producers are now making handsome profits…the rest of the farmers and consumers are the losers and the government is everywhere getting a piece of the pie BTW. The social divide is clearly visible here.
Today, one of the French government agencies, ANSE, filed an emergency procedure to curb the use of agricultural pesticides. Groundwater had been contaminated with S metolachlor across borders in several departments. Wonder… then come farmers revolt again and drive en masse to Paris to demand the neonicotinoid wer back etc etc….so biodiversity does disappear.
Zip, as ever I appreciate your thoughts. Re border crossers, the mind boggles at what we have in store in the slightly longer term, and I am reminded again to count my own blessings.
Zip , can you post a link to the article . It is of my interest . Thanks in advance .
I don’t know exactly what you are referring to… i’ll just assume it’s the migration crisis….
Migration crisis: ‘France overrun by foreign minors. ”
The European Union says it has finally decided to protect itself from illegal immigration, but behind the scenes member states are still asserting their interests. Italy, for instance, is tired of being on the front line of the waves of migration. Giorgia Meloni, the new president of the Council, was elected partly because of her firm stance on the issue.
During the Ocean Viking affair, she refused to accept migrants from that ship, which eventually docked in Toulon. And now there are tensions between France and Italy due to an impressive flow of foreign minors arriving in the Alpes-Maritimes from Italy. The strained relations between Giorgia Meloni and Emmanuel Macron are not helping this migration crisis. Yet this is not a new crisis. It is only getting worse. The number of unaccompanied foreign minors on French territory has increased 40-fold in 10 years and is estimated at 20,000. According to Italy, “there is no change in the management of unaccompanied minors ” said the interior ministry. According to the ministry, this influx is mainly due to the sharp increase in 2022 in the number of minors arriving in Italy, two-thirds of whom are 16 or 17 years old. At the end of 2020, there were 7,000 unaccompanied foreign minors on board. Two years later in the same period, there were more than 20,000. A record number.