“Worst default wave since global financial crisis. Our long-projected global default cycle has arrived.
“Standard & Poor’s reports that global corporate defaults in the year to date were the highest since the global financial crisis in 2009. The rating agency finds that nearly three-quarters of these defaults originated from the US. In fact, US corporate defaults are running at 2.5 times their level 12 months ago.”
“Dealmaking at 10-year low in first quarter as bank crisis hits confidence.
“Global dealmaking suffered its weakest start to the year in a decade, as a darkening economic outlook depressed activity and a transatlantic banking crisis put the brakes on risk taking… The value of mergers and acquisitions dropped 45 per cent year-on-year…”
https://www.ft.com/content/25f9e0b5-c31c-4db4-bf58-e95bb9a7d3c1
“BOE Says Global Investors’ Appetite for Risk Is Falling Sharply.
“The Bank of England said global investors are reining in their appetite for risk sharply due to turmoil in the financial system, and that more than half of respondents to a survey early this year are braced for a “high-impact” event… The findings of the survey, done *before* the banking meltdown, contrast with BOE Governor Andrew Bailey’s comments before lawmakers on Tuesday where he expressed confidence…”
“Signs of stress in commercial property.
“These spreads are telling us that worries about the commercial property market are getting more serious. “The direction of travel is concerning,” wrote analysts with Capital Economics in a note on Wednesday. “We believe there are risks of a credit crunch developing and spreads widening further.””
https://www.axios.com/2023/03/30/commercial-property-stress
“Piles of commercial-real-estate loans at banks may be worth just 77 cents on the dollar — if that…
“In the reeling office sector, however, the value of older office buildings in Manhattan could tumble 70%, said Stijn Van Nieuwerburgh, a professor of real estate and finance at Columbia University’s business school, in a talk Thursday…”
“The Banking Crisis Is Over: Beware What Comes Next…
“The problems in the US banking system will persist outside of the public view. They’re likely to cause very serious problems in the US economy if not addressed… The combination of a massive fiscal spending binge and a massive expansion of the US money supply (in the immediate aftermath of the COVID epidemic), has created an unprecedented amount of excess liquidity in the US banking system.”
https://seekingalpha.com/article/4591077-banking-crisis-is-over-beware-what-comes-next
“Want Safer Banks? Then Prepare for Slower Growth…
“Regulators were wrong to think only the biggest banks can pose systemic risks. Smaller banks such as SVB can destabilize the whole financial system by drawing attention to weaknesses that might be widespread.”
“Banking industry’s ‘near-death experience’ to send US economy into recession.
“America will experience a 1pc technical recession in the second half of this year, according to insurance giant Allianz. It blamed rapidly tightening credit conditions, exacerbated by the banking crisis triggered by the collapse of Silicon Valley Bank.”
“Fiery French protests and widespread Israeli strike reflect discord with democracy. The U.S. is not immune…
“Much of the world feels let down by democracy.. Citizens are stung by higher food, housing and medical costs, they just watched another rescue of the banking sector, and they’re worried about how long Russia’s invasion of Ukraine could leave energy markets unstable.”
“US puts Italy-sized chunk of Gulf of Mexico up for auction for oil drilling.
“An enormous swathe of the Gulf of Mexico, spanning an area the size of Italy, was put up for auction on Wednesday for oil and gas drilling, in the latest blow to Joe Biden’s increasingly frayed reputation on dealing with the climate crisis.”
https://www.theguardian.com/us-news/2023/mar/29/gulf-of-mexico-oil-gas-drilling-joe-biden-auction
“Net zero strategy shows UK will miss 2030 emissions cuts target.
“The UK government has said it is still on track to meet its international climate commitments under the Paris agreement, as analysis of its energy plans suggested more drastic policies would be needed to make the required carbon cuts.”
“Shoplifting in UK ‘worse than Europe’ as food prices soar…
“Tracey Clements, the head of BP convenience stores, blamed the cost of living crisis for rising levels of retail crime. “In the UK, unfortunately, shoplifting and the rise in crime against retail workers are more prominent than what I see in the other nine countries that I look after,” she said at a conference for Retail Week magazine.”
https://www.thetimes.co.uk/article/shoplifting-in-uk-worse-than-europe-as-food-prices-soar-snq8gl7zb
“The European Union has stepped back from its plan to ban all combustion-engined cars from 2035, under pressure from Germany and Italy.
“A new agreement will see the creation of a class of cars that can only run on carbon-neutral e-fuels after the Germans dug their heels in. It’s the second time that the EU has had to backtrack on its ambition to axe all ICE vehicles.”
“ECB quandary as falling energy costs cut headline inflation, but core prices still stubbornly high.
“…bond yields reversed initial losses as traders noted German CPI not falling as much as hoped and underlying price pressures remained stubbornly high, raising concerns the European Central Bank may need to keep raising interest rates.”
“Germany’s total public debt reached €2.37 trillion (roughly $2.6 trillion) at the end of 2022 — a new record high — Federal Statistical Office (Destatis) announced on Wednesday.
“The level of debt corresponded to a 2% — or €46.1 billion — rise from the end of 2021, when the coronavirus pandemic was still in full swing.”
https://www.dw.com/en/germanys-public-debt-reaches-new-record-high/a-65171937
“French unions have called for an 11th day of national strikes on 6 April, which could spill over into the Easter weekend.
“The Louvre was forced to close its doors on Monday (27 March), after dozens of staff members blocked the entrance as part of the wider strikes, prompting museum officials to close the building to visitors.”
“France Taps Emergency Fuel Stocks as Strikes Hobble Production.
“France is dipping into strategic stockpiles of fuels like gasoline and diesel for at least the third time in a year, with strikes over pension reforms decimating production and hampering logistics… As the protests drag on, the government is moving to conserve jet fuel…”
“SVB fallout puts focus on challenges faced by Japan’s regional banks…
“With a declining population, profit pressures amid the ultralow interest rate policy of the Bank of Japan, and pandemic assistance measures set to expire, regional banks were already under considerable pressure.”
https://www.japantimes.co.jp/news/2023/03/29/business/regional-banks-scrutiny-svb-fallout/
“South Korea Cuts Chip Production Most Since Global Financial Crisis as Demand Cools.
“South Korean chipmakers reduced their production by the most since 2008 in February, a sign of declining semiconductor demand that may be deeper and longer-lasting than feared. Production dropped 41.8% from a year earlier…”
“Global Creditors Face Long Fight With China Developers for Cash.
“Global creditors are bracing for a long-drawn battle to recover money from China’s troubled developers, as a property meltdown continues to roil the nation’s $735 billion offshore bond market for a third straight year… Frustrated dollar bondholders have been trying all they can to make defaulters pay…”
https://finance.yahoo.com/news/global-creditors-face-long-fight-091233047.html
“Bangladesh journalist charged over story about rising food prices.
“Bangladesh police on Wednesday charged a reporter from a leading newspaper with producing “false news”, stoking fears about media freedom, after an article about high food prices went viral. Shamsuzzaman Shams was picked up from his home in the industrial town of Savar…”
“Kenya police, crowds clash in third wave of price rise protests.
“Protesters threw stones at police in Kenya’s capital and attackers set fire to an office run by the president’s party in a western town on Thursday during a third wave of demonstrations organised by his opponents.”
https://www.reuters.com/world/africa/renewed-protests-kenya-authorities-vow-halt-descent-2023-03-30/
“Mozambique: How a rapper’s death sparked youth-led protests…
“Political observers predict that the new protest movement in Mozambique has “revolutionary potential.” Some even speak of a “Mozambican spring,” in reference to the Arab Spring protests that started in North Africa in December 2010.”
https://www.dw.com/en/mozambique-a-rappers-death-sparked-youth-led-protests/a-65178273
“South Africa to Hike as Power Cuts Stoke Inflation.
“South Africa’s central bank is set to raise interest rates to a 13-year high as the increasing cost of dealing with severe power outages further de-anchor inflation expectations and cripple the economy… Africa’s most-industrialized economy is suffering its worst-yet electricity rationing…”
“Argentina’s president seeks continued US support amid economic hardship as he meets Biden.
“Argentina’s President Alberto Fernandez met with his US counterpart Joe Biden at the White House on Wednesday and asked Washington to back Buenos Aires’ efforts to renegotiate the terms of a $44 billion debt agreement with the IMF as his country grapples with an economic crisis.”
“Quarter of emerging countries lose effective access to debt markets…
“Even as the effects of the banking sector turmoil recede in developed economies, investors have adopted a “risk off” approach to high-yield debt. This has tipped emerging market countries whose credit status was already shaky into territory where their ability to raise funds is seriously impaired.”
https://www.ft.com/content/814def52-0be6-48a1-91bc-2e99cdd5c420
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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Hello Panopticon
Time for some trivia… about Mozambique
It is one of the countries I follow closely for several reasons. Most importantly they speak Portuguese and I ‘ was there’ in Portugal when, in the aftermath of the Carnation Revolution, the country became independent. That was quite a state of affairs in Portugal the colonial period suddenly ended. I worked and lived in Portugal for a while in the aftermath of the Carnation Revolution and talked a lot with people with all these opposing dreams, desires colonial atrocities and pasts, big land ownership and everything that went with it….
Well whether the death of the rapper (interesting to see by the way) are going to cause an ‘African Spring’ is just the question….as if the Arab Spring, typically such a post-colonial nonsense concept, has produced anything except turmoil 🙂
Dutch King Willem-Alexander and Máxima insistently wanted a beachfront villa in Mozambique. That was their big dream. That’s sort of in the Orange family because they ‘ love Africa… WFF ? Tanzania a huge estate in SA…afijn all the ‘Out of Africa’ dream. And I won’t contradict them….
So he had a villa built in a resort in 2009. But yes you understand. All fuss and political controversy. They never learn these Royals. In 2012, it was over and done with the Mozambican dream of King Willem-Alexander and Queen Máxima. The king announced in November 2009 that he would sell his controversial villa. This was done under pressure from the Lower House, which was concerned about the increasing cost of security at the villa and the king’s business partners. Suspicions of tampering with building materials and the company’s profit motive caused additional controversy.
The villa – which, according to local sources, was said to have cost converted to €2 million – was only not delivered, according to the National Information Service. However, the property developer claimed that the property was completed in the summer of 2010. Moreover, Willem-Alexander and Máxima already stayed there during the 2010 World Cup in South Africa.
Their holiday villa on the Machangulo Peninsula was sold ‘for a symbolic sum’ to Machangulo SA, the organisation that operated as an association of owners of the property project on Maputo Bay.
Their villa which is now called ‘ The Monarch’ – before that its name was Villa Ukuthula – has been transformed into a luxury holiday resort. The villa’s royal history is also briefly mentioned. The spacious house in Mozambique is divided into three suites and the main house. A total of 12 people can stay there, if you rent the entire villa. You can also rent only a specific suite. The prices are therefore not bad: if you want to rent the entire villa for one night, you will pay a paltry 4,424 euros per night. For just the main house, you won’t have to save as long, as you can get one from 2,328 euros per night. And should you wish to add separate rooms, you will pay an extra 553 euros per room per night.
Ah yes the dichotomy also applies in Mozambique….he will probably get his ‘ royalties’.
Anyway in the link some kind of serious analysis 🙂
https://www.gisreportsonline.com/r/mozambique-energy/
Zip, thank you for your thoughts and recollections. Mozambique is not a country about which I know a great deal. Mostly it has made my newsfeed for these monstrous cyclones like Idai and Freddy coming in off the Indian Ocean and offloading unbelievable quantities of rain.
I’m sure the wealth disparity you mention is part of the reason for the Islamic insurgency in Cabo Delgado, which entered my awareness when it spilled over into that terrorist attack on Palma a couple of years ago, resulting in the deaths of several foreign gas workers:
https://www.bbc.co.uk/news/world-africa-61029991