“Global Manufacturing PMI in April Points to Greater Downward Pressure on Global Economy.
“The index has declined for two consecutive months, and has been running below 50 [ie in contraction] for seven consecutive months, indicating that the downward pressure on the global economy has increased and the momentum of economic recovery is weak.”
“Global air cargo shows continued decline in March.
“The International Air Transport Association (IATA) released data for March 2023 global air cargo markets showing a continued decline against previous year’s demand performance. This trend began in March 2022… The current global economic uncertainty is a key consideration. Even with record low unemployment rates, the global economy continues to decelerate due to a combination of factors.”
https://aviationsourcenews.com/analysis/global-air-cargo-shows-continued-decline-in-march/
“Recession or not, US economy is losing momentum.
“Based on recent data, the U.S. economy is currently paused on the threshold between a significant mid-cycle soft patch and a formal cycle-ending recession… The industrial side of the economy, which includes the manufacturing and freight transportation sectors, is already in a significant and prolonged downturn… confirmed by falls in container freight, diesel consumption and industrial electricity sales.”
https://www.reuters.com/markets/us/recession-or-not-us-economy-is-losing-momentum-2023-05-05/
“Subprime auto defaults on path toward 2008 crisis levels, say portfolio managers…
“They also studied evaporated savings of the lowest income borrowers since mid-2021 peak levels, and anticipate a greater share of all U.S. consumers will “run out of excess savings,” in the months to come, leaving them vulnerable to missing payments and delinquencies.”
“The Regional Banks Are Telling Us a Lot About the Economy…
“Today’s slow-moving banking crisis …exposes some less-than-desirable traits of today’s economy. Perhaps most importantly, it shows an entire economic system that is increasingly and deliberately catering to the “haves” at the expense of the “have nots.” In economic parlance, it is zeroing in on the most price-inelastic consumers at the expense of others.”
“Why the Fed Might Not Ride to the Rescue When Recession Hits…
“…according to Sarah House, senior economist at Wells Fargo & Co., “The nature of the inflation that we’re seeing right now, we think that the Fed’s actually going to be pretty reluctant to ease policy even as the economy is entering a recession.””
“Bond Traders Bet on Biggest Fed Shift in Decades on Credit Risks.
“Fresh fears over a recession-inducing credit crunch are spurring bond bulls to ramp up bets that the Federal Reserve will embark on the most abrupt policy shift in almost four decades… “Eventually, lower rates are going to be needed,” said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co.”
“Shortsellers in the firing line after US bank shares plunge [the short selling ban of September 18th, 2008 marked the start of the panic collapse of the stock market – h/t Financelot on Twitter]….
“Analysts at JP Morgan, the giant that last week bought First Republic Bank out of government receivership, predicted that Washington would be compelled to take further steps such as an emergency halt to short-selling — a way to bet that a share price will fall — of bank stocks.”
“Queueing for food, sleeping in cars: at the coalface of Sydney’s cost of living crisis [Australia]…
“This is the pointy end of Australia’s cost of living crisis, where the skyrocketing price of housing, power, food and fuel is smashing those who can least afford it, and changing the very makeup of the clientele on the breadline.”
“A think-tank has warned rising food prices are causing a crisis comparable to that of sky-high energy bills seen over the past year [UK].
“Food prices are the new energy bills when it comes to how people are experiencing the cost of living crisis,” the Resolution Foundation said following the publication of a recent report… Food prices soared 15.7% – the highest on record – in April…”
https://www.aol.co.uk/news/cost-living-food-prices-energy-163310557.html
“‘Something out of a police state’: Anti-monarchy protesters arrested ahead of King Charles’ coronation…
“Republic, Britain’s largest anti-monarchy group, told CNN that police – without providing any reason – arrested organizers of the anti-monarchy protest. At around 7 a.m. (2 a.m. ET) police stopped six of Republic’s organizers and told them they were detaining and searching them, Republic director Harry Stratton told CNN at the protest.”
“Europe’s credit crunch will be the next chapter of this banking crisis.
“If anything does go wrong – and there is a high probability that it will, given the galloping contraction in the money supply – the eurozone still lacks the machinery necessary to contain a banking crisis. The EU authorities do not have the legal power to conduct the sort of rescue measures just concocted by the US… This is not to say that Washington has made a good fist of it.”
https://www.telegraph.co.uk/business/2023/05/05/europe-credit-crunch-next-chapter-banking-crisis/
“French Finance Minister Bruno Le Maire pledged to accelerate the pace of debt reduction, a week after the country’s credit rating was cut.
““We have to reduce our debt, and in an accelerated way,” Le Maire said Friday in an interview on LCI television… “We will be responsible,” he said. “The state of our public finances requires that with higher interest rates that we move quicker to lower our debt.””
“German industrial output slumps, recession fears rise.
“German industrial production fell more than expected in March, partly due to a weak performance by the automotive sector, spurring again recession fears in Europe’s largest economy. Production decreased by 3.4% on the previous month…”
https://www.reuters.com/markets/europe/german-industrial-output-drops-34-march-2023-05-08/
“Fears of deeper Hungarian recession as industry shrinks, retail sales fall…
“Central European economies have taken a hit from double-digit inflation that has sapped demand and created problems for companies as they struggle to pass on costs to shoppers with increasingly stretched budgets.”
“Slovak caretaker premier Heger quits as political crisis deepens.
“Slovakia’s caretaker prime minister tendered his resignation on Sunday, deepening his country’s political crisis and potentially paving the way for a nationalist politician who is sceptical over aid for Ukraine to return to power.”
https://www.ft.com/content/e5552d5f-cc37-475e-a0e7-636958dedd50
“Russia has sparked a “mad panic” as it evacuates a town near the contested Zaporizhzhia nuclear power plant, a Ukrainian official says.
“Russia has told people to leave 18 settlements in the Zaporizhzhia region, including Enerhodar near the plant, ahead of Kyiv’s anticipated offensive… The UN’s nuclear watchdog warned a “severe nuclear accident” could occur.”
https://www.bbc.co.uk/news/world-europe-65515443
“Smoldering Iran nuclear crisis risks catching fire.
“Even as the United States and its European allies grapple with Russia’s invasion of Ukraine and rising tensions with China, the smoldering crisis over Iran’s nuclear program threatens to reignite… A renewed crisis over Iran would come at a bad time for U.S. President Joe Biden…”
https://financialpost.com/pmn/business-pmn/smoldering-iran-nuclear-crisis-risks-catching-fire
“China’s Main Trade Fair Struggles to Lure Buyers as Global Growth Slows.
“China’s largest trade fair was meant to be a triumphant return for the world’s biggest manufacturing nation after three years of being mostly online. Instead, the mood was downbeat as factories grapple with a slowing global economy and a scarcity of US buyers.”
“Bolivian Senate Approves General Terms of Bill to Monetize Gold.
“Bolivia’s Senate approved Thursday in general terms a central bank bill that would allow the country to monetize its gold reserves, a key step to ease a dollar shortage and tame a growing financial crisis… The country has burned most of its international reserves and recently faced difficulties to pay for fuel imports.”
“Cubans demonstrate and call for freedom in the town of Guantánamo.
“A large group of Cubans came out on Saturday to protest shouting “Freedom, Freedom” in Caimanera (Guantánamo province), a town 1,000 kilometers from Havana, according to videos that circulated on social networks, while the authorities attributed it to an “indiscipline” of drunk people.”
“US-Mexico migration deal raises fears for struggling border cities.
“An agreement between the United States and Mexico designed to curb the surge of migrants arriving at the US doorstep marks a dramatic new precedent in relations between the two countries, analysts said, warning that the deal could further overwhelm border cities already struggling to cope.”
https://www.theguardian.com/us-news/2023/may/05/us-mexico-border-immigration-deal
“South Africa’s president has ordered army personnel to be stationed at power stations as theft and sabotage adds to the inability of state-owned utility Eskom Holdings SOC Ltd. to meet electricity demand…
“Andre de Ruyter, the former head of South Africa’s state power utility, estimated the amount of money that’s being stolen from Eskom at 1 billion rand ($55 million) a month.”
https://finance.yahoo.com/news/south-africa-ramaphosa-sends-army-071701945.html
“Sudan crisis: Mediators over a barrel in mission to end fighting.
“With the Sudanese capital, Khartoum, transformed from tranquil city to war zone, Saudi Arabia and the US have called the warring parties to Jeddah to seek agreement on a ceasefire. But as Sudan expert Alex de Waal says, it will just be a short-term, emergency step.”
https://www.bbc.co.uk/news/world-africa-65495539
“Sudan’s neighbours have little to offer refugees, warns UN.
“More than 110,000 people are now estimated to have crossed into other countries… But, in a region suffering acutely from hunger and already hosting sizeable refugee populations with vastly decreased funds, aid workers are warning there are serious questions over what awaits the new arrivals once they cross the border.”
“Tens of thousands join protests against Israeli judicial overhaul.
“Tens of thousands of Israelis joined protests across the country on Saturday against Prime Minister Benjamin Netanyahu’s bitterly disputed plans to tighten controls on the Supreme Court… Crowds gathered in central Tel Aviv on Saturday in a show of defiance against plans which they see as an existential threat to Israeli democracy.”
“EU prosecutors grill Lebanon’s finance minister over central bank corruption.
“A European judicial team questioned Lebanon’s caretaker Finance Minister Youssef Khalil on 5 May as part of an international investigation into outgoing Central Bank Governor Riad Salameh, who allegedly embezzled $330 million in public funds through commission fees on bond sales.”
“The death toll after ethnic clashes in India’s remote north-east has risen to 54, with fresh violence overnight despite authorities rushing in troops to restore order.
“Thousands of soldiers were sent to Manipur state after a protest march by a tribal group turned violent on Wednesday. Authorities imposed an internet blackout and issued shoot-at-sight orders…”
https://www.abc.net.au/news/2023-05-07/ethnic-clashes-continue-in-indias-manipur/102314078
“Central banks raising interest rates makes it harder to fight the climate crisis…
“Instead of treating central bankers as powerful, benevolent, technocratic guardians of price and macro stability, it is time to downgrade their role to that of servants of fiscal and industrial policies. These need to be geared toward promoting rapid decarbonization and the renewable energy transition.”
You can read the previous “economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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Hello Panopticon
One of the posts that caught my attention that weekend was about the ‘repel stalks’ of the global economy.
Nobody knows about them because who has heard of Russian-Swiss multimillionaire Margarita Louis-Dreyfus who spent some 1 billion euros from a Dutch holding company over the past four years.
The sums ended up in an Amsterdam-based private limited company that serves as the family’s piggy bank, according to recently filed annual reports. Thus, the Netherlands plays a central role in the extensive cash flows of one of the world’s largest commodities traders.
Ask your neighbours, friends or family what the Dutch companies with the highest turnover are. Small chance they will mention the names of Vitol, Louis Dreyfus or Trafigura. And yet all these trading houses – whose names many people do not even know – run at the top of the Dutch market. Oil trader Vitol is even the largest company in the Netherlands with a turnover of €236 billion (2021)
Commodity trading, which accounts for most of the Dreyfus Group’s business, is housed in the Louis-Dreyfus Company.
Cereals, oilseeds, sugar, ethanol, coffee, cotton, milk, metals, fertilisers, sugarcane and citrus are Louis-Dreyfus Commodities’ main products.
In 2012, the group announced it had handled more than 70 million tonnes of commodities (which alone would account for 9% of world commodity trade), for a record net profit of $1.1 billion. In 2019, that figure rose to $357 million23.
Especially in times of crisis, trading companies know how to monetise their position. Because who do you call when all of Europe suddenly wants to get rid of Russian gas? Right, liquid gas traders, such as Rotterdam-based Vitol.
Perhaps it would be good to pay attention to them wherever possible, no matter how secretively they operate, are mostly not listed on the stock exchange and are time and again involved in ‘ tax scandals’…. They are true ‘trading mafia’ companies of unprecedented magnitude which, in the case of Dreyfus, determine much of who gets what to eat where and at what price 🙂
https://fr.wikipedia.org/wiki/Groupe_Louis-Dreyfus
Zip, how interesting – thank you for those insights. I must confess, although I am aware of Trafigura and Vitol, particularly the latter via its oil price forecasts, I had not known that they were Dutch.
Apparently, the lady you mention – Margarita Louis-Dreyfus – lost her husband to leukaemia in 2009 and is now the partner of Philipp Hildebrand, vice chairman of BlackRock. That’s some power couple.
In fact, they are not Dutch companies…. that is only because the Netherlands like, by the way, the UK are among the four! main ‘ tax havens in the world and therefore they have a ‘ headquarters’ in the Netherlands.
I once wanted to make a docuseries about it. It’s about turnovers that amount to 5,000 billion a year.
But it was made clear to me that I had better not do that 🙂
Specially Trafigura has a problem history with the Netherlands…..there’s a lot gone out about it
https://www.quotenet.nl/zakelijk/a164225/oprichter-trafigura-op-twee-na-grootste-bedrijf-van-nederland-overleden-164225/
I read these two articles in the wrong order. Should have read them this way instead:
https://indi.ca/how-space-is-not-going-to-save-us/
https://caitlinjohnstone.com/2023/05/08/look-with-both-eyes/
Thanks, Lou. Those are terrific articles. From the space one:
“The cost of sustaining about 7 people on the ISS is $3–4 billion per year, or about $500 million per person. At this cost it would consume the entire GDP (🤮) of Earth to sustain just 200,000 people in space. And to sustain what? To shit in a vaccum cleaner and lose 1–2% of your bone mass every year? To spend $56 million to get a decent coffee? Space is a nice place to visit, but a terrible place to live.” 🤣
Caitlin Johnstone’s piece certainly resonates. John Butler touches on some of those same themes in this clip: “The Challenge of Climate Change”. Watching it is a very soothing way to spend 45 minutes!
https://www.youtube.com/watch?v=FP-9l6BeagE
Thank you pintada… what an incredible link about our ‘space’ madness. It would almost make you claustrophobic on our earth 🙂
Here is a good one for today. A billion dollar Ponzi scheme for solar energy. Its a long article but good and interesting
https://www.theatlantic.com/magazine/archive/2023/06/dc-solar-power-ponzi-scheme-scandal/673782/
Thank you, Heather! Let me read…