“Is a global food crisis the new normal?
“A looming question haunts nations worldwide: is a global food crisis becoming the new normal? Alarming trends in agriculture, climate change and supply change disruptions have led experts to raise concerns.”
https://tickernews.co/is-a-global-food-crisis-the-new-normal/
“World Bank warns oil price could soar to record $150 a barrel.
“Oil prices could soar to a record high of more than $150 a barrel if the war between Israel and Hamas leads to a repeat of the full-scale conflict in the Middle East witnessed 50 years ago, the World Bank has warned.”
“Yemen’s Houthis enter Mideast fray, hardening spillover fears.
“Yemen’s Houthis have waded into the Israel-Hamas war raging more than 1,000 miles from their seat of power in Sanaa, declaring on Tuesday they had fired drones and missiles at Israel in attacks that highlight the regional risks of the conflict.”
“Warning of crisis, 300 economists urge government to reallocate nonessential spending [Israel].
“A group of about 300 senior economists on Monday appealed in a letter to Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich to immediately halt all nonessential expenditure items in the state budget, and reconsider spending priorities in order to cope with a looming economic crisis during the ongoing war…”
“Cash-strapped Lebanon unprepared as threat of war looms.
“A gruelling, four-year-long economic collapse, widely blamed on the governing elite, has left Lebanon ill-prepared for another disaster, and volunteers and local authorities are scrambling to fill the gap with limited means.”
https://www.france24.com/en/live-news/20231031-cash-strapped-lebanon-unprepared-as-war-threat-looms
“Egyptâs natural gas imports have ground to a halt, the cabinet said Sunday, in a development that reflects the impact of the Gaza conflict on the North African nation and could dash hopes of a resumption of exports to Europe…
“The halt in the gas imports appears linked a decision earlier this month by Israeli authorities to shut down the offshore Tamar gas field…”
“China leads record central bank gold buying in first nine months of year.
“China has spearheaded record levels of central bank purchases of gold globally in the first nine months of the year, as countries seek to hedge against inflation and reduce their reliance on the dollar. Central banks have bought 800 tonnes in the first nine months of the year…”
https://www.ft.com/content/abc39431-1755-4906-b11e-ee9e53baadfe
“China’s economy stumbled again in recent months with factory activity falling and foreign investment plunging 34%…
“Factory activity dropped through the month of October, with China’s manufacturing purchasing managers’ index falling to restrictive territory at 49.5… Meanwhile, foreign direct investment plunged 34% year-over-year in September… That’s the largest monthly decline ever recorded…”
https://uk.sports.yahoo.com/news/chinas-economy-stumbled-again-recent-220411023.html
“Overnight borrowing costs for some Chinese financial institutions jumped to as high as 50% on Tuesday, as a month-end scramble for cash squeezed liquidity and stressed money markets.
“In addition to seasonal factors, the cash shortage was caused by an upcoming flood of government bond issuance, and traders also pointed to market fears of default by cash-strapped institutions.”
“The United States is entering a tax crisis with skyrocketing deficits and debt…
“The public deficit doubled last year due to the fall in tax revenue; debt held by the public is on track to surpass the World War II high, and long-term interest rates, due to a mix of factors, have hit 5%. With the aging of the population and the political deadlock in Congress… the problem is only set to worsen.”
“We broke the money printer in 2008 when GDP stopped moving up in line with M2. Now, money supply is contracting for the first time since 1933.” [US]
https://twitter.com/Swordfishv44183/status/1719385211769618601
“62% of Americans are still living paycheck to paycheck, making it âthe main financial lifestyle,â report finds.
“High inflation and higher interest rates continue to weigh on American households. As of September, 62% of adults said they are living paycheck to paycheck, according to a new LendingClub report. The figure is unchanged from last year.”
“Consumer lending increased by 7.3 per cent in the year to September, which marked the highest annual growth rate since November 2008 at the height of the financial crash, new data from the [Irish] Central Bank shows.
“Net consumer lending amounted to âŹ48 million in September, which contributed to the increase in the annual growth rate to 7.3 per cent from 6.8 per cent in August.”
“Britons in Most Arrears Since Financial Crisis, Credit Firm Says.
“Britainâs cash-strapped mortgage holders are missing payments and having their debit cards rejected as high interest rates squeeze finances… âWe expect the situation to get worse before it gets better,â said Gerry McHugh, chief executive officer at Pepper Advantage.”
“The number of British businesses in financial distress has rocketed to levels not seen since the financial crisis in 2009.
“Official figures showed the number of company insolvencies in England and Wales jumped 10% year-on-year to 6,208 in the third quarter.”
“Eurozone Money Supply Continues To Contract For Third Consecutive Month.
“… the effects of the ECBâs official rate hike are being passed on to the money market. Specifically, if we look at the evolution of loans, it is worth noting that credit to non-financial firms entered negative territory in September, falling by -0.4% year-on-year-year.”
“Eurozone economy shrinks by 0.1%, putting it at brink of recession.
“The eurozone is teetering on the brink of a winter recession after the latest official figures showed its economy contracted by 0.1% in the third quarter of 2023. In a worse than forecast performance, the 20-nation single currency zone has now failed to grow in three of the past four quarters…”
“BASF makes deep cost cuts in response to energy crunch.
“BASF unveiled fresh cuts to investment and measures to reduce operating costs as the company adjusts to more expensive energy, higher interest rates and a slump in demand… Germanyâs energy-intensive industries continue to struggle with high energy prices, even after they receded from record levels last year…”
“Franceâs Macron Travels to Central Asia, Seeking Friends, Uranium in Russiaâs Backyard…
“After finding itself suddenly unwelcome in its traditional sphere of influence, France is casting further afield. Thatâs why President Emmanuel Macron will travel to energy-rich Central Asia this week to visit Kazakhstan and Uzbekistan, two suppliers of the uranium that powers the countryâs nuclear reactors.”
https://time.com/6330066/france-energy-security-central-asia-russia-war/
“Australiaâs banks face unprecedented wave of threats, RBA warns.
“Australiaâs banking industry faces emerging threats from potential rapid-fire bank runs to climate change and geopolitical tensions that are without historical precedents, a senior Reserve Bank official has warned.”
https://www.theguardian.com/australia-news/2023/oct/31/rba-warns-australian-bank-threats
“Iran Printing Huge Sums Of Money Amid Rising Inflation.
“Iranâs former chief banker says the government has printed about $5.6 billion worth of national currency in the past year, aggravating the countryâs inflation rate. Abdolnaser Hemmati, the former governor of the Central Bank of Iran (CBI), said Monday that the annual growth of the countryâs monetary base was about 41 percent in August…”
https://www.iranintl.com/en/202310310559
“Thousands of Afghan refugees fleeing Pakistan as deportation deadline looms.
“Thousands of Afghan refugees and migrants in Pakistan are heading to the border… Earlier this month, Pakistanâs interim interior minister, Sarfaraz Bugti, issued an October 31 deadline for all âillegalâ refugees and migrants to leave, citing security concerns.”
“Sri Lanka: Protests over electricity polices to occur in and around Colombo Nov. 1… Heightened security, transport disruptions likely; clashes possible…
“Advising the protesters to carry out their activities peacefully, Colombo Fort Magistrate Thilina Gamage further advised the police to make arrests in the event any protester fails to act in a peaceful manner.”
“Two garment workers die as unrest rages over minimum wage in Bangladesh…
“As the news of Russellâs death spread, the agitated workers vandalised several factories and set fire to Jamuna Fashionâs textile scrap warehouse at Konabari, the fire service and police said, citing witnesses. The protesters then stormed ABM Fashionâs factory…”
https://bdnews24.com/bangladesh/eelmje8fuq
“Energy rationing costing Ecuador shrimp industry $5 million a day.
“‘This crisis requires urgent action,’ says shrimp industry executive… Ecuador’s shrimp industry is suffering losses of as much as $5 million (âŹ4.7 million) a day because of energy rationing across the country, shrimp producers trade body Camara Nacional de Acuacultura (CNA) said.”
“South Africaâs state-owned oil company is looking to fix its energy problems by chartering in tankers to store diesel.
“PetroSA needs vessels as part of a drive to ensure there is enough supply to run generators and reduce power cuts that are harming the economy. South Africa does not have sufficient tank capacity onshore.”
“South Africa Has a Bigger Problem Than Loadshedding…
“…in business and finance circles, the countryâs inability to generate enough electricity is seen as its magnum opus. That would be a mistake, though, because the country has a more serious and knotty problem: the collapse of its logistics network.”
“Conflict uproots record 6.9 million people in Congo.
“Conflict and escalating violence have uprooted a record 6.9 million people in the Democratic Republic of Congo, mostly in the east of the country, the International Organization for Migration said on Monday. Years of rebel conflict and recurrent natural disasters have helped fuel one of the largest humanitarian crises in the world.”
https://www.reuters.com/world/africa/conflict-uproots-record-69-million-people-congo-iom-2023-10-30/
“Sudanese refugee children in Chad face malnutrition and trauma.
“The conflict in Sudan between the army and paramilitary Rapid Support Forces (RSF) has reignited ethnic violence in West Darfur, where the RSF is accused of committing acts of ethnic cleansing against the Masalit community. More than 400,000 Sudanese have already crossed the border into Chad…”
“Hunger report sounds alarm on emergencies at risk of going forgotten amid crisis in Palestine…
“In addition to Palestine â now added to the countries of highest concern â other countries highlighted at greatest risk of a serious deterioration in food security and possible starvation are Burkina Faso, Mali, SouthâŻSudan and the Sudan. In total, urgent humanitarian action is essential in 18 hunger hotspots â comprising 22 countries or territories…”
You can read the previous âEconomicâ thread here. I’ll be back tomorrow with a âClimateâ thread.
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Thanks Dr Scanlon for the link to simplicius, I too had recognised all the Old Testament biblical references being thrown around by Netanyahu and Erdogan especially… references to the Crusades, the Cross vs Crescent era? Wow..
, despite having been raised by intensely passionate atheist parents. As a child/teen, I always thought Bible stories, were like popular fairy tales, up there with Rumpelstiltskin đ I
It wasnt until I went to big city university and exposed to evangelicals of licorice all-sorts, when I realised so many people did take it all seriously.
And researching the “Bible as History”, as part of my Uni studies (I thought ancient history units might be interesting, but mainly taken up as easy extra credits for a Science major) ..
that Old Testament is gross with its blood-letting, insane cruel laws, and a wrathful punishing god. Who needs horror movies?
The Hamas operation on 7 Oct, was named “Al-Aqsa Flood” after all, reference to the Great Flood.? 40 days – means 15 November.
Anyway, Narallah (sp? Ie the chief dude of Hezbollah) is expected to make a statement to his faithful after Friday prayers, on 3 November.
As for the Guardian report on Australia, Im personally not buying into potential for bank runs,
Ive always thought our top 4-5 banks are well-capitalised. Maybe the smaller “no-frills-” regional banks, but Ive always stayed with one of the biggest, same with insurance companies, I may pay more in premiums etc, but they dont argue with me when I have needed to make a claim đ
Our biggest problem economically is the housing bubble and small-medium businesses going broke for various reasons. Oddly, housing prices are still obscenely high, even increasing, along with rents
but big drops in supply… … seems plenty of people,
(i guess those well into their mortgage terms), are hanging on, and not selling. Rental vacancy rates are below 1% But even with a big federal govt stimulus package to increase housing supply may help, but the bubble must burst soon. I think the RBA has to increase rates, they are still way below inflation. I suspect younger First home-buyers who bought during the CoVid years will form the first wave of forced sales and prices will crash.
As for climate worries, Im personally in an Aussie Goldilocks zone in the south-east mtns – have been all year.. but Im still shuddering to think of when full summer hits.
The Guardian ran an article yesterday about the US evangelical support for Israel:
“One strand of evangelical theology holds that the return of Jews to the region starts the clock ticking on a seven-year armageddon, after which Jesus Christ will return.”
https://www.theguardian.com/world/2023/oct/30/us-evangelical-christians-israel-hamas-war
Hello Pan,
Apparently, the World Bank has not yet understood that oil prices of 150 euros/dollar are completely out of the question. That remains an interesting Tverberg paradox.
Going on about that a nice article on the profitability of fossil multinationals. Even at the current surely high price of 80/90 dollars, very little profitability remains. Especially the latter quotes about the disappointing Kazakh mega-fields speak volumes. It makes one wonder about the actual extractable reserves of oil and gas in Russia…. It will be no different there.
I did some thorough researching of their ‘expectations and depletion’ this week. Surely there are quite a lot of apparently reliable sources on that.
That paints a picture that is not very rosy for a country that floats on energy exports. Especially the costs from their extensive polar Sioberian regions are going to ‘throw a spanner in the works’ add some melting permafrost and you can see how the already deplorable infrastructure there will deteriorate. And they don’t have much money to invest right now.
Then you are talking about several decades, during which the ‘export part’ will soon decline is my expectation, especially given their huge economic effort, capital destruction and energy-consuming war over that odd piece of Donbas.
Not much will come of the Greater Russian Eurasian Empire, I suppose…. đ They may be careful
https://oilprice.com/Energy/Crude-Oil/Why-Big-Oil-Stocks-Are-Selling-Off-Right-Now.html
“Apparently, the World Bank has not yet understood that oil prices of 150 euros/dollar are completely out of the question. That remains an interesting Tverberg paradox.”
Zip, right. The gravitational pull of consumers’ affordability limits would prevent prices from remaining at $150 for long. Plus that sort of price spike would in itself almost certainly start puncturing debt bubbles left, right and centre with the resulting financial crisis further undermining demand and prices.
“Even at the current surely high price of 80/90 dollars, very little profitability remains. Especially the latter quotes about the disappointing Kazakh mega-fields speak volumes.”
Rapidly dwindling capex productivity has very much been the story of conventional crude this century.
Hello Pan another piece of news đ
Coworking giant WeWork on the brink of bankruptcy
Although WeWork had already avoided bankruptcy in 2019, the company specialising in coworking is rediscovering its old demons. According to the Wall Street Journal, “people familiar with the matter” are considering filing for bankruptcy as early as next week. The group, which was already in bad shape and has a debt of almost $3 billion, saw its share price fall 40% on Tuesday, a 96% drop in a year. WeWork was destined for success and was once valued at as much as $47 billion.
l
The New York-based company now plans to file for bankruptcy protection in New Jersey, known as Chapter 11. One of the reasons WeWork is in this situation is that it “did not pay interest” to its creditors on 2 October, reports the Wall Street Journal. The company had 30 days to make the payments, which have still not reached creditors. However, WeWork did “reach an agreement” with its creditors, giving it “an additional seven days to negotiate with stakeholders before initiating a default.”
https://www.lefigaro.fr/societes/le-geant-du-coworking-wework-au-bord-de-la-faillite-20231101
Thanks, Zip. Looks like SoftBank will take a big hit from this. Perhaps humanoid robotics with AI will prove more profitable for them!
https://www.theinformation.com/articles/softbank-looks-to-invest-75-million-in-openai-backed-humanoid-robotics-startup
NEWS COMMODITIES
China is leading a ‘voracious’ gold-buying spree as central banks try to shrink dollar reserves
According to the Council, central banks have bought 800 tonnes of gold so far this year, up 14% from last year at this point. A whopping 181 tonnes out of that total comes from China alone. The country’s central bank holds a total of 2,192 tonnes.
…Demand for the yellow metal has been rising as central banks attempt to diversify their reserves away from the US dollar. This trend, along with some countries trying to de-dollarize their trade relationships, has resulted in a broad push away from the greenback in 2023.
Since the US leveraged the strength of the dollar to slam Russia with sanctions, lock its banks out of the SWIFT system, and freeze billions in foreign reserves after the country invaded Ukraine, many countries have taken notice and tried to shift their economies away from reliance on the US currency.
It’s not if …just when the dollar is dethroned…this is not going to end well
“Itâs not if âŠjust when the dollar is dethronedâŠthis is not going to end well.”
The question I always come back to is what could replace the dollar? It’s so embedded and still the best looking horse in the glue factory. Of course that could change if the USA’s alarming fiscal trajectory triggers a crisis, in which case, as you say, things will not end well.
So far this century we have seen a gradual move away from the dollar in favour of diversification and, lately, gold but it’s still by far the most popular currency. For those who like to keep track of such things, you can follow the central banks’ forex reserve holdings here:
https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4
https://www.king5.com/article/news/local/engine-failure-washington-state-ferry/281-519e4f3a-68c8-4051-85f1-bd451a01c94f
A ferry shit show it constantly on going. This a local collapse in the making. They are going to replace with electric boats right we will see how far that gets. Everything is falling apart here in the local hoa to other areas. I will see what Colorado looks like when I visit at thanksgiving.
Heather, have fun in Colorado.
Our ferries are similarly flaky. CalMac, the operator, has just managed to coax a little more life out of our 38-year-old ferry, the MV Hebridean Isles, after ten months of repairs:
https://www.bbc.co.uk/news/uk-scotland-highlands-islands-67199047
https://www.msn.com/en-ie/news/world/germany-found-to-be-the-most-discriminatory-in-a-study-on-being-black-in-the-eu/ss-AA1j8n7B?ocid=msedgntp&cvid=a20f948682c24ea8852d92f1f48b0346&ei=75
I found this headline rather interesting. I have not yet read the report.