Dear readers, a heads-up that this will be my last economic thread for a while, as I am taking a holiday and will be away from tomorrow until Thursday 28th Sept inclusive. I’ll be back with an economic thread on Friday 29th Sept and then a climate one on Saturday 30th. Thank you all for bearing with me, especially my donors and subscribers – you are appreciated!
A small group of volunteers will very kindly be filling in for me when I’m away, so you can continue to follow climate and economic news here in our usual fashion.
“Global inflation fears as oil price rises towards $100 a barrel.
“Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% since June, after Russian and Saudi Arabian production cuts and rising demand from China.”
“The World Is Struggling to Make Enough Diesel… opening a new inflationary front and depriving economies of a fuel that powers industry and transport alike.
“While oil futures are rocketing — on Friday they were just below $95 a barrel in London — the rally pales in comparison with the surge in diesel. U.S. prices jumped above $140 to the highest ever for this time of year on Thursday. Europe’s equivalent soared 60% since summer.”
https://time.com/6315039/diesel-shortage/
“Major central banks are on the brink of peak rates — but the inflation battle might not be over…
“Challenges …remain… with one being the prospect of significantly higher oil prices. Crude futures recently climbed to a 10-month high, which could impact goods costs and inflation expectations in Europe as well as the U.S.”
“World disappointed by the U.N. now looks elsewhere for answers…
“With dozens of world leaders descending upon New York for the United Nations General Assembly’s annual gathering, global problems are showing up fast and thick at the world body’s door — with no solutions in sight. And many countries are starting to look elsewhere to do something about them.”
https://www.japantimes.co.jp/news/2023/09/17/world/politics/united-nations-general-assembly-focus/
“Global South leaders demand end of ‘plundering international order’.
“G77+China summit comes amid growing frustration with the Western-led world order because of widening differences over the Russian war in Ukraine, the fight against climate change and the global economic system.”
https://www.aljazeera.com/news/2023/9/16/global-south-leaders-demand-end-of-plundering-international
“‘A real big deal’: Biden backs economic corridor as shifting geopolitical alliances fragment the global economy…
“This Biden-led initiative will comprise of two separate corridors, the east corridor connecting India to the Middle East and the northern corridor connecting the Middle East to Europe… Saudi Arabia’s double dipping underscores the range of economic and strategic opportunities that abound for the various economies caught between the dueling U.S. and China…”
“The market’s heaviest hitters are sounding the alarm on US debt
“Three market experts have cited concern that growing US debt will send interest rates up. Ray Dalio and Bill Gross both pointed out a supply-demand imbalance that will keep fueling borrowing costs. US debt supply will only grow, as a recession would expand the federal deficit, Jeffrey Gundlach added.”
“Does Wile E Coyote explain US voters’ gloom amid buoyant economy?
“…as an exclusive Guardian/Harris Poll survey found this week, two-thirds (68%) of Americans report it’s difficult to be happy about positive economic news when they feel financially squeezed each month. Across the country, poll after poll shows people are not feeling it. That’s not good news for the Biden administration…”
https://www.theguardian.com/business/2023/sep/16/us-economy-inflation-wages-salaries-recession
“Some banks see new cracks forming in a resilient US consumer…
“Executives from Wells Fargo (WFC), Fifth Third Bancorp (FITB) and Capital One (COF) all said this past week that they are noticing a divergence between the two ends of their customer base, with lower income consumers feeling more pain on several fronts.”
“California sues oil companies claiming they downplayed the risk of fossil fuels…
“The civil lawsuit filed in state Superior Court in San Francisco also seeks creation of a fund – financed by the companies – to pay for recovery efforts after devastating storms and fires.”
“[UK] Wind industry on hold after auction flop spooks developers.
“Offshore wind farm developers are delaying non-essential work on UK projects after a government renewables auction flopped, with industry sources warning they may be forced to wait until after the next election to get schemes moving again.”
“Parents in some of Scotland’s poorest communities are being pursued by debt collectors over unpaid bills for their children’s school meals.
“Renfrewshire council has admitted contracting a firm of Sheriff Officers – who have the power to seize property and raid homes – to chase the outstanding dinner tickets.”
https://www.dailyrecord.co.uk/news/scottish-news/parents-poor-areas-scotland-being-30958285
“NHS sinks into £7bn cash crisis as inflation and strikes bite.
“The NHS is heading into an unprecedented financial crisis and will overspend its budget by at least £7bn next year as the effects of inflation and strikes plunge hospital trusts into alarming levels of debt, according to leading independent experts.”
“One year after a mini-Budget meltdown, Bank of England prepares to test the market again.
“The Bank [of England] is seeking to offload more than £700bn of bonds it snapped up in the aftermath of the 2008 financial crisis and the pandemic to help support the economy… If sales are ramped up, officials at the Bank will be hoping they do not see a repeat of the volatility seen this time last year.”
“France to let fuel retailers sell below cost in inflation fight, prime minister says.
“The French government plans to temporarily lift a ban on retailers selling road fuel below cost as part of efforts to stem inflationary pressures on households, Prime Minister Elisabeth Borne told newspaper Le Parisien. A renewed surge in pump prices this summer has complicated the government’s attempts to curb consumer inflation…”
“Germany: EU’s largest economy faces ‘big deterioration’ – and risks slipping back into recession.
“The German economy is facing a “big deterioration” in the second half of the year, with the European Commission downgrading its forecasts for the bloc’s largest economy. The German economy remained stagnant in the second quarter having sunk into a recession over the winter.”
“Czech protesters rally against government’s pro-Western policies.
“Thousands of supporters of a pro-Russian Czech opposition party gathered in Prague on Saturday to protest against the country’s centre-right government, criticising its economic management and military support for Ukraine.”
“Poland, Hungary, Slovakia to introduce own bans on Ukraine grain.
“…the flood of grains and oilseeds into neighbouring countries reduced prices there, impacting the income of local farmers and resulting in governments banning agricultural imports from Ukraine… the three countries argue their actions are in the interests of their economies.”
“The cost of damage from the record floods in Greece’s breadbasket is estimated to be in the billions…
“The storms flooded 720 square kilometers (280 square miles), mostly prime farmland, totally destroying crops. They also swamped hundreds of buildings, broke the country’s railway backbone, savaged rural roads and bridges and killed tens of thousands of livestock.”
“Italy: Frustrations grow on all sides as thousands of migrants flock to Lampedusa island.
“Italian Prime Minister Giorgia Meloni has vowed to take “extraordinary measures” to deal with an influx of migrants, including renewed calls for a naval blockade of North Africa.”
“Tunisia expels hundreds of sub-Saharan African migrants amid crackdown.
“Since Saturday, authorities in Tunisia have been cracking down on illegal migrants, most of whom are from sub-Saharan African countries. According to authorities, around 200 migrants “who were preparing to make the clandestine boat trip” towards Europe were arrested.”
“Chinese shadow bank exposed to troubled property developers…
“The connections between Zhongrong, a giant of China’s $3tn shadow finance industry, and property developers have fuelled fears of spillover effects from a slowdown in the real estate sector, which accounts for more than a quarter of China’s economic activity.”
https://www.ft.com/content/5948fd27-8195-4974-879e-125546112be3
“Authorities in China have reportedly detained employees of troubled real estate giant Evergrande Group [from its wealth management department], as the company faces a massive debt crisis.
“The Shenzhen police disclosed Saturday (Sept 16) that several staffers employed by Evergrande’s financial arm have been arrested. But police failed to give more details…”
“Alarm sounds for default rate of Asian bonds. Bond default rates are increasing worldwide, but especially in Asia-Pacific because of the impact of the real estate crisis in China.
“The defaults are for bonds across all classes of credit ratings, with the average time to default for Asia-Pacific bonds taking place more than twice as quickly as bonds at the global level.”
https://www.bangkokpost.com/business/investment/2648841/alarm-sounds-for-default-rate-of-asian-bonds
“Singapore’s non-oil domestic exports (NODX) contracted for the 11th consecutive month in August, falling by 20.1 per cent, with both electronics and non-electronics seeing a decline.
“The drop follows a revised 20.3 per cent decrease in July and a 15.7 per cent contraction in June. The August decline is worse than a Reuters poll forecast of a 15.8 per cent drop.”
“Sri Lanka’s economy shrank 3.1% in the April-June quarter, official data showed on Friday, as the country struggles to claw out of its worst financial crisis in decades.
“The downturn was driven by high inflation, a depreciating currency and lower purchasing power, the Census and Statistics Department said in a statement.”
https://www.reuters.com/markets/asia/sri-lankas-economy-shrank-by-31-q2-crisis-impact-2023-09-15/
“Pakistan’s other crisis… macroeconomic crisis, the most serious in its history, continues to warrant urgent and sustained attention…
“But there is another crisis that is worsening and is also consequential for Pakistan’s future. This is the crisis in human development — with most indicators of literacy, education, health and other aspects of social justice and human welfare deteriorating in recent years.”
https://www.dawn.com/news/1776498
“Central Khartoum in flames as war rages across Sudan.
“Flames gripped the Sudanese capital Sunday and paramilitary forces attacked the army headquarters for the second day in a row, witnesses reported, as fighting raged into its six month… The war in Sudan has decimated already fragile infrastructure, shuttered 80 percent of the country’s hospitals and plunged millions into acute hunger.”
https://www.france24.com/en/live-news/20230917-central-khartoum-in-flames-as-war-rages-across-sudan
“Mali, Niger, Burkina Faso sign mutual defence pact.
“”This alliance will be a combination of military and economic efforts between the three countries”, Mali’s Defence Minister Abdoulaye Diop told journalists. “Our priority is the fight against terrorism in the three countries.””
https://www.africanews.com/2023/09/17/mali-niger-burkina-faso-sign-mutual-defence-pact/
“NATO chief warns Ukraine allies to prepare for ‘long war’…
““Most wars last longer than expected when they first begin,” Stoltenberg in an interview with Germany’s Funke media group published Sunday. “Therefore we must prepare ourselves for a long war in Ukraine.””
You can read the previous “Economic” thread here. I’ll be back on Friday 29th September with an “Economic” thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
Halpy Holidays!
Thank you. ☺
Hello Pan,
That is a wondrous measure to start selling fuel at a loss at the pump.
So reactions are mixed 🙂 The Veran government spokesperson did act very optimistic and spoke of up to 50ct.
The economy ministry stated under ’embargo’ that this was utter nonsense. At most, it could save some ct….. “Such a sale at a loss is unlikely without compensation from the state. (…) It is hard to imagine companies agreeing to operate while losing money because they would rather cease operations.”….
But yes compensation by the state is not there. It was just bekebd today that subsidy schemes for fisheries will be abolished from 15 October. It is all totally unaffordable for the French state which has already indicated that cuts will have to be made by 19 billion over the next year.
What is certain is that it is going to be the death knell for those thousands of rural pump owners, who already operate on a very small margin. “My members make 40%, 50% or even more from the sale of fuel, so if they sell at a loss, I will give them three months,” the pump owners sector stated.
The measure could only be introduced by supermarket chains where 60% of fuels are sold anyway….Many economists even expect that this measure could have “perverse effects” in supermarkets….. “Motorists could earn a few cents per litre at supermarket petrol stations. But it is possible that the latter, benefiting from the regular customer base they would have attracted, will take advantage of the situation to raise their shelf prices to compensate for the loss in fuel sales.”……
Well however it states it is clear that the panic in France is huge…. the distances are great and there is relatively a lot of ‘countryside’ . I once made a tour of my neighbours during the last crisis….. they have now really lost a significant proportion of their salary on transport costs and there is no alternative…. France is heading for tough times with this high especially diesel price.
The whole renewable ‘energy’ fairy tale is falling apart at an accelerated pace anyway
Anyway today the government comes out with their climate eco plans 🙂
Have a nice holiday…… it will be stormy weather be careful crossing to the mainland…. ..
Thank you, Zip. Re the stormy weather, I saw that the thunderstorms spawned a tornado in Mayenne yesterday:
https://www.bfmtv.com/meteo/intemperies/ca-m-a-fait-tres-peur-des-temoins-racontent-a-bfmtv-le-passage-d-une-tornade-en-mayenne_AV-202309180089.html
Re the fuel, the brutal reality for countries like France and the UK, however governments may try to finesse it, is that we can no longer afford the lifestyle we have enjoyed up until now. And, as the Bank of England may be on the verge of finding out, our days of borrowing lavishly to pretend otherwise may be over.
Thanks, Zip. I always appreciate your on the ground reporting.
https://www.king5.com/article/news/local/ferry-route-reduced-to-one-boat-bainbridge-island-bremerton-seattle/281-deed75e3-c85a-4cb5-9653-06973446b793
Our ferry system is collapsing among other things that are going.
Heather, it is a very similar situation here. Infrastructure is, as you say, fraying:
“Ferry passengers on CalMac’s Islay route face substantial capacity cuts from next month unless another vessel is found amid the operator’s most complex winter timetable for decades triggered by its ageing fleet.”
https://uk.news.yahoo.com/calmac-ferry-crisis-key-islay-150900967.html
This whole nyc climate week is twisted but just go to web site and who the sponsors are.
https://www.climateweeknyc.org/
Its all the same stuff build more solar, vote, grow your own food, lets go green and go electric, we need to pass laws to go sustainable.
” growing frustration with the Western-led world order”
The west doesn’t run the G77 countries’ govts. If countries are having economic problems maybe they should look in a mirror. Mirror,still one best reasons for abortion.
How’s that unregulated capitalism working out for the poor & those working paycheck to paycheck,globally? I hope gas & diesel go to $10.00/gal. or higher since the world is so enamored with free market enterprise. Probably the same assholes that are complaining about inflation would be gouging the public if they were on the BOD & stockholders of huge corporations.
Maybe some could shut up & pay the gouged price or shut up if they aren’t going to boycott any companies that gouge.
Signed – Mad as Hell
Once again, I apologize. I keep forgetting the Clever Apes motto: “It’s not my fault.”
Therefore all my problems are someone else’s fault. 😉