The Humanitarian Financial Crisis: Plenty of Guns and Little Butter
The tens of thousands of dead, injured and homeless in the recent earthquake in Morocco and the broken dams in Libya are the latest victims of natural disasters. Casualties in the Russia/Ukraine war add to the growing numbers of victims of armed conflicts around the world. The U.N. and partner organizations announced at the end of 2022 that 339 million people in 69 countries will need assistance in 2023. Unfortunately, at the same time the number of those in need of humanitarian assistance increases, the International Committee of the Red Cross (ICRC) is in a dramatic financial crisis.
The Roman Empire’s Financial Collapse: Are We Witnessing History Repeat Itself?
Last year, billionaire investor Carl Icahn noted that rampant inflation was a key factor that brought down the Roman Empire. He also warned investors that “the worst is yet to come.”
“We printed up too much money and just thought the party would never end,” he said.
Icahn also cautioned that “inflation is a terrible thing” and “you can’t cure it.”
India’s banking system faces severe liquidity deficit
The widest liquidity deficit in more than four years is grappling India’s banking system. The nation’s financial institutions are facing unanticipated difficulties due to record central bank borrowings and a significant outflow of funds for tax payments.
Tech sector feels credit crunch
Technology businesses are facing a funding squeeze as venture capital (VC) firms rein in their investing. James Dowdall, partner – deals advisory at ReSolve said that the advisory firm is seeing increasing numbers of restructuring challenges among tech businesses…The cash runways are pretty short; sometimes these companies only have three months before they will run out of money.”
Household savings fall to decades low, borrowing rises [India]
RBI’s data said the rate of increase in financial liabilities in FY22 was the second highest since Independence. The only time the flow was sharper was in Financial Year 2006-07 when it was 6.7 per cent.
The primary cause of decreasing savings and increased borrowing is likely the combination of stagnant or declining household incomes in the face of rising inflation.
Global central banks unite in ‘higher for longer’ credo
Despite gradually cooling, inflation in most large economies remains well above the target 2% level which central bankers deem healthy. In August it stood at 3.7% in the United States and 5.2% in the euro zone.
But investors remain sceptical that central banks will stay the course given doubts over the strength of the Chinese economy and geopolitical worries from the Ukraine war to U.S.-Chinese rivalry.
“By this time next year, we anticipate that 21 out of the world’s 30 major central banks will be cutting interest rates,” Capital Economics wrote in a commentary entitled “A tipping point for global monetary policy”.
China, India lead Asia’s biggest hydropower crunch in decades
“Despite a strong growth in solar and wind power generation in Asia, supply from fossil-fuel thermal power plants has also increased this year as a result of a large decline in hydropower generation,” said Carlos Torres Diaz, Rystad Energy’s director of power and gas markets.
“Intense and prolonged heatwaves across the region have resulted in low reservoir levels and the need for alternative sources of power to help meet demand,” he added.
Russia’s indefinite ban on diesel exports threatens to aggravate a global shortage
Warren Patterson, head of commodities strategy at ING, said in a research note published Friday that Russia’s ban on fuel exports was a major development ahead of the Northern Hemisphere winter, a period which would typically see a seasonal pick-up in demand.
34,915 Adults in Westminster ‘Rationing heating or electricity to keep up with debt payments’
34,915 adults in the City of Westminster are forced to cut back on essentials like heating and electricity to keep up with debt repayments. 57,609 are in financial difficulty, and 21,822 have changed their diet to less healthy options to save cash.
Yen’s buying power sinks to all-time low amid sustained deflation
Currency drops below 1970 value, raising travel and import costs for Japanese
UK recession risk grows as higher interest rates weigh on firms
Service sector and manufacturing output falls, with cost of living crisis also hitting businesses
Williamson said: “The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK. Underscoring the severity of the UK’s deteriorating situation, September’s downturn is the steepest since the height of the global financial crisis in early 2009, barring only the pandemic lockdown months.”
Sandra Horsfield of the investment bank Investec said: “The trend in total retail spending volumes has been broadly sideways. The economy is entering more troubled waters and a [relatively mild and short-lived] recession is likely to ensue this winter.”
[I guess The Guardian put that in: [relatively mild and short-lived] LOLOL!
Are we destined for a zero-sum future?
A backdrop of slower economic growth may be shaping attitudes of tomorrow that cut across political divides
A recent suite of experiments in the UK and US also found consistent evidence that zero-sum thinking predisposes people to downplay the potential benefits of trust and co-operation, and see others as potential rivals or threats rather than partners and collaborators.
India Rice Export Ban Is Fueling Risk of Social Unrest, UN Says
Africa’s reliance on rice imports makes it vulnerable to bans
- UN agency head says rice is now main concern to food security
- Soaring prices are fueling concerns about food insecurity for billions of people in Asia and Africa who depend on the grain.
“Rice, especially in Africa, can certainly bring potential conflict or social unrest, which at this moment in time would be quite dangerous,” Alvaro Lario, who leads the International Fund for Agricultural Development, said in a Thursday interview in New York.
A stranger in your hotel room? Kitty-litter shortages? Online attacks are causing real-world effects.
While Nicoletti hopes executives don’t take the wrong lesson from this experience and start paying ransoms, he does believe that real-world problems from a cyberattack should be a “wake-up call” for consumers, who should “really look at the people they have relationships with, and look to see what their security posture is.”
Yaverbaum agrees, saying “for mainstream America — us pedestrians who just buy stuff, all of us — the only way that we’re going to get educated and be aware is the hard way.”
“This is going to touch every single company, every single consumer in this country over the course of the next decade, bar none,” he said. “It’s not a crazy prediction to make. We’re not ready for what’s coming. “
You can read the previous “Economy” thread here. I’ll be back tomorrow with a “Climate” thread.
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