“What happens when $2 trillion is sucked out of the global economy? It may not be pretty.
“Central banks have been credited with averting a global depression twice over the past 15 years: Once after the 2008 financial crisis, and again at the height of the coronavirus pandemic.
“But the tactics they deployed to restore confidence and keep money flowing from banks to the economy amounted to a high-stakes experiment — one that may be impossible to unwind without destabilizing the financial system.” [Photo is actually of the Corryvreckan Whirlpool by the island of Jura.]
https://edition.cnn.com/2023/05/19/economy/quantitative-tightening-global-impact/index.htm
“Worries may be growing about a global financial crisis, but not at the Bank of England.
“Businesses, in particular, are becoming increasingly nervous. Based on responses to the latest Global Risk Survey from Oxford Economics, they think banking system strains and tightened credit supply now pose the greatest threats to the global economy. Most strikingly, a full-blown financial crisis is no longer viewed as a remote possibility.”
“UK and US regulators were told of a state-led drive to “rig” interest rates in the 2008 financial crisis, but covered it up, evidence indicates…
“At the height of the 2008 financial crisis, when bank lending had almost ground to a halt, central banks around the world urged calm. But behind the scenes, the investigation reveals evidence that they were pulling levers to restore calm artificially – measures which would later be ruled to be against the law in the UK.”
https://www.bbc.co.uk/news/business-65635243
“Bond Market Caught Between Fears of US Debt Default, Rate Hikes… A Fed pause in June, once seen as certain, no longer assured…
“Bond traders are losing faith that the Federal Reserve is done tightening monetary policy and will ride to the rescue with rate cuts this year.”
“Even Flirting With U.S. Default Takes Economic Toll…
“Even if a deal is struck before the last minute, the long uncertainty could drive up borrowing costs and further destabilize already shaky financial markets. It could lead to a pullback in investment and hiring by businesses when the U.S. economy is already facing elevated risks of a recession, and hamstring the financing of public works projects.”
https://www.nytimes.com/2023/05/20/business/economy/debt-limit-default-economy.html
“[US] Bankruptcies are skyrocketing — and that’s only half the story…
“Why so many bankruptcies? The answer is one word: capital. Regardless of an economy’s growth, capital is needed to run businesses. Working capital. Equipment and property financing. Cash flow to buy inventory and pay salaries. And unfortunately that capital has become much, much more expensive, and much less available.”
“Hedge Funds’ Ultra-Bearish Oil Bets Signal US Recession Angst.
“Money managers that trade derivatives linked to oil and fuel prices are about as bearish as they’ve been in more than a decade, suggesting they’re braced for a recession that could cause contracts from crude to jet fuel to take another tumble.”
https://finance.yahoo.com/news/hedge-funds-ultra-bearish-oil-130000479.html
“Oil drilling is collapsing in the US as producers rein in output, mirroring a recent plunge in rigs searching for natural gas.
“Rigs targeting crude declined by 11 to 575 this week, according to data released Friday by Baker Hughes Co. It’s the biggest weekly drop since September 2021. The pullback was led by the Permian Basin of West Texas and New Mexico…”
“G7 alarms climate activists over support for gas investments…
“The April meeting of G7 climate ministers eventually agreed, despite tussles between Japan and European nations, that gas investments “can be appropriate to help address potential market shortfalls” following Russia’s invasion of Ukraine and the disruption it has caused in global energy markets.”
“Norway faces backlash from campaigners for ‘reckless’ pursuit of Arctic oil and gas.
“Norway last year overtook Russia as Europe’s biggest natural gas supplier and says it is now seeking to maintain Europe’s energy security by exploring the Barents Sea for further resources.”
“Rome climate protesters turn Trevi fountain water black…
“The protesters from the Ultima Generazione (Last Generation) group held up banners saying “We won’t pay for fossil [fuels]” and shouted “Our country is dying.” Uniformed police waded into the water to take away the activists, with many tourists filming the stunt and a few of the onlookers shouting insults at the protesters, video footage showed.”
“Thousands mass for pro-EU rally in Moldovan capital, amid tensions with Russia.
“A huge pro-EU rally has taken place in Moldova’s capital Chisinau, organised by the country’s President Maia Sandu. An estimated 75,000 people turned out to support Moldova’s push to join the European Union.”
https://www.bbc.co.uk/news/world-europe-65667634
“Europe’s politicians impose price caps to address soaring food costs.
“Europe’s retailers and governments are locked in their fiercest tussle over food costs for 50 years, with policymakers resorting to price controls to tackle the worst cost of living crisis for a generation. Despite lower energy prices easing overall price pressures, growth in the cost of food has continued to soar…”
https://www.ft.com/content/133ca49d-b25a-47ee-9bfa-d8c2f62a5f3
“Cost of fish and chips soars to £9 as Rishi Sunak urged to help takeaways with bills [UK]…
“Chancellor Jeremy Hunt slashed energy bill support to businesses by 80% in the Spring Budget from £18bn to £5bn, forcing many small businesses including takeaways to pass on costs to consumers. Lib Dem leader Sir Ed Davey called on the Rishi Sunak to reverse the cut.”
https://www.mirror.co.uk/news/politics/cost-fish-chips-soars-9-30031959
“One million in UK switch off broadband due to cost of living crisis, charity warns…
“The charity said its survey showed broadband – an increasingly essential service with many job applications, utility bills and local council services moving online – was becoming out of reach for greater numbers of households.”
“Starvation, skipping meals and living in a freezing car: The brutal reality of life on the poverty line in 2023 Australia – as the cost of living crisis spirals out of control…
“Families have been sharing their gruelling stories of surviving on the poverty line, with some existing on just $6-a-day for essential living costs including housing, food and bills.”
“Australia’s big supermarkets increased profit margins through pandemic and cost-of-living crisis, analysis reveals…
“Guardian Australia analysis of Coles and Woolworths financial accounts over a five-year period show the dominant supermarkets were able to use the pandemic to not just sell more goods, but also increase the amount they profited from sales.”
“Surge in strikes at Chinese factories after Covid rules end…
“For most of the strikes, the root cause is money. Although China’s economy is gradually recovering from the battering it took during three years of strict zero-Covid measures, factories are still struggling. And the worsening political relations between the US and China are starting to make themselves felt in the economy.”
“China Bars Purchases of Micron Chips in Escalation of US Clash.
“China issued its latest salvo in an escalating semiconductor war with the US, announcing that Micron Technology Inc. products have failed to pass a cybersecurity review in the country. In a statement Sunday, Beijing warned operators of key infrastructure against buying the company’s goods…”
“China’s $23 Trillion Local Debt Mess Is About to Get Worse.
“In 2021, a remote coal town in northeastern China was forced to undergo an unprecedented financial restructuring. Its struggles since are an ominous sign for President Xi Jinping as other heavily indebted municipalities look set to follow suit.”
“Crippling heat waves deepen Asia’s reliance on Russian energy.
“The extreme heat that’s been scorching Asia in recent weeks has produced one clear beneficiary — Russia. As countries across the region scramble to make sure they have enough coal, gas and fuel oil to keep the lights on, Russian energy being shunned by the West is looking increasingly attractive.”
https://www.japantimes.co.jp/news/2023/05/21/asia-pacific/russian-energy-reliance-asia-heat/
““F**K”: Imran Khan let’s it out as power cuts during live address, netizens in splits…
“During his live address, Imran Khan lost his temper as he witnessed a power cut and there was a complete blackout. Once there was a blackout, he was heard abusing in the video that has gone viral over the internet.”
“Israelis Take to the Streets for 20th Week of Protests Against Netanyahu’s Judicial Coup.
“Protest organizers in charge of the main demonstrations in Tel Aviv are focusing this Saturday’s protest on what they say is the ‘raiding of the public coffers’ by Israel’s ultra-Orthodox coalition parties, just as the government prepares to pass the state budget in the coming days.”
“Yemeni riyal falls to 1,320 to dollar as president calls for financial aid…
“The Yemeni government’s efforts to stem the devaluation of the riyal, which included shutting down unlicensed exchange firms, providing oil and goods importers with dollars, suspending the internal transfer system between exchange shops known as hawala, and restricting the smuggling of foreign currencies out of the country, have largely failed.”
https://www.arabnews.com/node/2307116/middle-east
“Sudan’s Crisis Is Pushing Egypt to the Brink…
“In the past month, it is estimated that over 90,000 Sudanese refugees have journeyed into Egypt; the real numbers are likely much higher, as thousands are waiting at the border—without shelter, safe drinking water, and reliable food—to cross over. Yet Egypt itself is not the ideal safe haven: it is currently grappling with an economic crisis, severe food shortages, and a devaluation of its currency, the Egyptian pound.”
https://nationalinterest.org/feature/sudan%E2%80%99s-crisis-pushing-egypt-brink-206484
“Heavy fighting in Khartoum hours after Sudan rivals agree to upcoming ceasefire…
“Multiple truces have been violated since fighting broke out five weeks ago… Khartoum residents — who for weeks have been sheltering from brutal urban warfare amid desperately low supplies of food and vital resources — were sceptical that this time would be any different.”
“Sudan war hits crucial gum arabic business…
“The golden blobs of resin tapped from thorny acacia trees are an emulsifying agent used in everything from soft drinks to chewing gum and pharmaceuticals. Sudan is the world’s largest producer of the raw gum which is a major source of foreign currency for the northeast African nation.”
https://www.france24.com/en/live-news/20230522-sudan-war-hits-crucial-gum-arabic-business
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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2023 and nations still wanting to drill in the Arctic is madness. Unsurprising, but simultaneously madness.
Yes. I recall Biden recently greenlit the Willow Project on Alaska’s North Slope. Russia’s Vostok Oil project is already underway:
“War and sanctions notwithstanding, Russian state oilmen proceed with the development of the Vostok Oil project. It is to produce more than 100 million tons of oil per year…”
https://thebarentsobserver.com/en/industry-and-energy/2023/05/remotest-arctic-coast-lies-21-km-oil-pipes-stacked-ready-russias-new
I like your website btw!
Thanks! And yeah doesn’t seem like any country in a position to drill in such places is free from critique. Still though, this:
“Speaking in Hammerfest last week, Norway’s Petroleum and Energy Minister Terje Aasland urged oil and gas executives to “leave no stone unturned,” going so far as to call it their “social responsibility” to find more hydrocarbons in the Barents.”
Is almost comical. I can have sympathy for poor nations that suffer daily blackouts if their coal plants aren’t firing, but nations like Norway claiming social responsibility to drill in the arctic is eyerolling.
Crisis what crisis?
Ascension in France: tourist sites packed
This long weekend, Beauval ZooPark and Mont Saint-Michel were crowded.
This led to long waiting times. As many families went out, many attractions were swamped, which led to two major sites advising not to come! Such was the case of ZooParc de Beauval. Visitors complained of endless queues to see the animals, including the famous pandas of this emblematic Loir-et-Cher site. Zoo director Rodolphe Delord stated that Ascension Day was “the record day of the year”.
Many visitors blamed the park for selling too many tickets on the internet.
In Giverny, the Ascension weekend also brought thousands of tourists to the small village, as well as to the famous home of Claude Monet. The impressionist painter’s beautiful gardens were crowded. We welcome tourists, but we have many, far too many,” stated the mayor of the small town he spoke of “the high price of fame”. These places were by no means the only ones to have had to deal with large flows of visitors. Cabourg, Côte d’Azur, Arcachon, Normandy, Corrèze… The local press reported on a busy weekend in many areas. A real challenge for the municipalities, but also a great opportunity for retailers in the area…..
The discretionary economy celebrates high… as long as we can look at the panda bear tties to keep us entertained. What it is all about, no one knows or can tell me
Let’s just hope it always remains ‘ pretty much’ the same 🙂
Do you have any idea Panopticon why people are willing to queue up for hours to watch a Panda bear with their children?
I could ‘ philosophise’ about it for hours but frankly, I don’t understand any of it.
https://www.lefigaro.fr/…/ascension-des-sites…
Zip, thank you for the intel. One wonders what is at play here.
Perhaps there are still enough pandemic-era savings sloshing around the system, coupled with a “What the hell – let’s have fun while we can,” mentality to keep some parts of the discretionary economy buoyant for the time being, even as purchasing power ebbs away.
I agree about the insanity in the arctic and lets add the insanity with the Colorado river with it. Washington post headline today Biden saves the Colorado river right. They aren’t doing jack or s:4)$$ to save it. Its gonna crash on their watch and it not going to be pretty either
Heather, thank you for the heads up on this:
“The agreement, announced on Monday, will involve the three states, water districts, Native American tribes and farm operators cutting about 13% of the total water use in the lower Colorado basin, a historic reduction that will probably trigger significant water restrictions on the region’s residents and farmland.”
https://www.theguardian.com/us-news/2023/may/22/colorado-river-states-california-arizona-nevada
Hey Heather, I didn’t know until recently that farmers have been paid to cut water off, or that there was so much corporate and foreign ownership of farmlands. Eg Growing water-hungry alfalfa for Saudi dairy cattle?
This is long, but the photos are some of the best I’ve seen.
https://coloradosun.com/2023/05/21/republican-river-basin-drying-farming/
The Maricopa-Gila Indian communities were promised in signed official treaties enough water to irrigate all of the arable land within their reservation. LOL
They have enough land that they apparently have rights to all of the water Arizona can beg-borrow-or-steal. In 1980 or so I was peripherally involved with the law suit (on the water quality issues) which was apparently finalized in 1988.
https://digitalrepository.unm.edu/nawrs/38/
Obviously, they deserve to continue to get their water, no matter what. Unfortunately, there isn’t enough water to go around, and Las Vegas, and Phoenix are up-stream and will get the lions share (of what is left after Los Angeles gets theirs first).
The original book on the subject (with revisions to make it current) if you are interested:
https://www.amazon.com/Cadillac-Desert-American-Disappearing-Revised-ebook/dp/B001RTKIUA