“The Israel-Hamas war is a “new cloud” on the horizon that threatens to darken an already murky global economic outlook, the head of the International Monetary Fund has warned.
“Kristalina Georgieva said severe shocks are becoming “the new normal” in an economy dominated by weak growth.”
“Israel’s military on Friday called for all civilians of Gaza City, more than 1 million people, to relocate south within 24 hours, as it amassed tanks near the Gaza Strip ahead of an expected ground invasion.
“”Now is a time for war,” Defence Minister Yoav Gallant said on Thursday as Israeli warplanes continued pounding Gaza in retaliation for the weekend attacks by Hamas militants that killed more than 1,300 Israelis, mostly civilians.”
“Israel-Hizbollah clashes prompt fears of Lebanese militia joining Hamas war.
“In the days since Hamas’ surprise assault on Israel, the Jewish state has also been fighting on another front: its northern border with Lebanon, where light artillery exchanges have killed three members of militant group Hizbollah.”
“If Israel doesn’t stop bombing Gaza, war may open on ‘other fronts,’ Iran foreign minister warns…
““In light of the continued aggression, war crimes, and siege on Gaza, opening other fronts is a real possibility,” Amirabdollahian says, speaking to journalists on his arrival.”
“After Nagorno-Karabakh, Azerbaijan eyes a strategic strip of Armenia.
“Meghri sits at a strategic crossroads that regional powers, including Azerbaijan, Iran, Turkey and Russia, are competing to access — prompting fears it could soon be at the center of a new war… “I think the threat of a flare-up is very real,” said Stefan Meister, a South Caucasus expert at the German Council on Foreign Relations.”
“Brace for global fallout from higher-for-longer interest rates, World Bank warns.
“The prospect that high interest rates will keep constricting the global economy is worrying World Bank officials as they look to the impact on nations nursing large debts.”
“Panicking central banks risk creating another financial meltdown…
“Financial institutions are nursing large capital losses on their bond holdings; and, much as with subprime mortgages in 2008, it is impossible to know where this could blow up the financial system. Several smaller banks and one large one, Credit Suisse, have already collapsed.”
“Biden borrowing binge driving ‘unsustainable’ rise in global debts, warns IMF…
“Janet Yellen, the US Treasury Secretary, has insisted that interest payments on the country’s mammoth borrowing pile remain sustainable… The IMF said politicians around the world faced tough choices to bring debt down… Officials said: “For all countries, it is becoming hard to balance public finances.“”
“Bond-Supply Fears Reawaken.
“The Treasury market isn’t taking all the debt sales too well… again. The bond-market breather of the past few days appears to be over. Long-term yields are on the rise again after buyers were reluctant to step up for a bond auction on Thursday.”
“US inflation higher than expected in September.
“US inflation was higher than forecast in September, raising the prospect that the Federal Reserve may raise interest rates following similarly robust recent data on the strength of the jobs market.”
“All the headlines say that inflation is now 3.7%. But, what they fail to mention is that this is building on YEARS of inflation.
“3.7% inflation is building on 8.2% in September 2022 and 5.4% in September 2021. That means that inflation since September 2021 is has been nearly 20%. Furthermore, even if the rate of inflation is falling, prices are still RISING.”
“Consensus opinion suggests the U.S. economy is on course for a soft landing… The trouble is that the consensus often turns out to be wrong.
“In early 2007, most economists also expected a mild fallout from the U.S. housing downturn. Going further back, investors remained relatively upbeat after the stock market crash of October 1929, even as the United States teetered on the brink of depression.”
“Credit card companies are racking up losses at the fastest pace in almost 30 years, outside of the Great Financial Crisis, according to Goldman Sachs…
“It is far from over, the firm predicts… What is unusual is that the losses are accelerating outside of an economic downturn.”
“Thousands of autoworkers walk out at Ford’s largest factory as UAW escalates strike.
“The United Auto Workers union is raising the stakes against Detroit’s Three automakers, shutting down Ford’s largest factory and threatening Jeep maker Stellantis. In a surprise move Wednesday night, 8,700 members left their jobs at Ford’s Kentucky truck plant in Louisville.”
“NATO vows to respond if Finland-Estonia gas pipeline damage is deliberate.
“NATO has promised a “determined” response if damage to an undersea gas pipeline between Finland and Estonia proves deliberate, as investigators said traces of an “external, mechanical force” had been found on the seabed.”
“Court orders Estonian state energy firm to halt shale oil plant construction.
“Estonia’s supreme court has ordered the state energy company Enefit to halt construction on a shale oil facility because of the damage it will do to the environment… “It’s remarkable that the first climate court case in Estonia – and in the Baltics – ended in a win,” said Kertu Birgit Anton, an activist…”
“Greta Thunberg and Norwegian activists stand firm against wind farm on Sami reindeer herding land.
“Greta Thunberg is among dozens of activists protesting outside the office of Europe’s largest onshore wind farm operator in Norway today. The activists say a transition to green energy shouldn’t come at the expense of the rights of Indigenous people.”
“Experts warn of risk of civil unrest in UK due to food shortages…
“…80% of experts believe logistical distribution issues leading to shortages are the most likely food-related cause of civil unrest in the next 10 years. But, considered over a 50-year horizon, they said catastrophic failure resulting in insufficient food to feed the UK population, rather than distribution problems, would be the most likely cause.”
“NHS presses Treasury for £1bn bailout as waiting lists hit record high.
“The NHS is pressing ministers for a £1 billion bailout to stave off a financial crisis it says has resulted from the doctors’ strikes. Talks have begun with the Treasury as health chiefs say they will have to abandon attempts to bring down waiting lists if finances run out of control.”
“[UK] Mortgage defaults have risen at their fastest pace since 2009 as lenders warn over plans to restrict the supply of deals.
“There has been a spike in the number of homeowners missing mortgage payments, data from the Bank of England shows, as they battle high interest rates.”
“The International Energy Agency warned on Thursday of possible shortages of diesel fuel in Europe this winter due to supply constraints including the European Union embargo on Russian crude.
“The IEA said Europe would need sustained imports from elsewhere but stringent winter quality specifications could constrain supplies, warning: “It may take another mild winter to avoid shortages.””
“France Tightens Energy-Saving Measures To Avoid Another Crisis.
“The French government will further restrict store and commercial real estate lighting usage and fine offenders as part of a new set of measures aimed at saving energy. France and all other European countries are looking to curb energy and gas use after last year’s energy crisis…”
“Police use teargas on banned pro-Palestinian rally in Paris as Macron calls for unity.
“French police used teargas and water cannon to break up a banned rally in support of the Palestinian people in Paris on Thursday night, as President Emmanuel Macron urged the French to remain united amid fears a spillover of the Israel-Hamas conflict in France, home to Europe’s largest Jewish and Muslim communities.”
“Economic crisis worse than expected, says German government.
“The government has downgraded its economic growth projections for the current year, signalling a deeper-than-expected economic crisis and slower recovery, according to their revised autumn forecast published on Wednesday.”
“Is the next subprime crisis brewing in China’s property market?
“…China’s outlook is complicated by the rise of financial instruments that help investors manage risks in good times but accelerate downturns in bear markets, as the global financial crisis showed 15 years ago. A recent court decision in Shanghai on a case of asset-backed security fraud warns of potential dangers.”
“Brazil’s energy strategy in Itaborai raises climate concerns.
“Huge investments in fossil fuels are supposed to revive the fortunes of Brazil’s oil hub, Itaborai. While the government’s plan is welcomed on the ground, climate activists accuse President Lula of breaking promises.”
“Fertile Cuba relies on food imports as farmers lack seeds, fuel.
“Crop production has plummeted in fertile Cuba as aid for farmers from a government grappling with tough sanctions and the worst economic crisis in decades has dried up. The country today imports almost all its basic foodstuffs, up from an already high 80 percent before the coronavirus pandemic…”
“Economic crisis: Pakistan’s poor flee cities.
“Spiralling inflation and an imploding economy force struggling families to abandon city life, seeking survival in their home villages… Some have decided that the only answer is to leave or to send their families back to their home villages, where they can live more cheaply thanks to family networks and assets.”
“Deporting a million Afghans won’t solve Pakistan’s problems.
“When Pakistan’s caretaker government announced it will deport all “illegal” immigrants by the end of the month, everyone knew exactly what it meant: Afghan refugees are once again to be the targets of Islamabad’s threats.”
“Afghanistan earthquakes a ‘disaster on top of a disaster’, World Food Programme says.
““We have 50 million people who do not know where their next meal will come from, and the World Food Program is only able to support 3 million people due to a massive funding shortfall,” Kropf said in Herat, a northwestern province where the WFP has begun distributing rations.”
“Why are we avoiding the ‘what if’ of nuclear war?
“…One would hope bright minds in political capitals around the world are gaming how to avoid a nuclear conflict. But that notion calls to mind a moment when President Reagan after being briefed on the concept of Mutual Assured Destruction posed the simplest of questions, “What is Plan B?” to which his advisors had no answer.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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