“Bankers sound alarm on more inflation, new financial crisis at Hong Kong summit.
“As more than 300 banking and investment executives gathered in Hong Kong to discuss “living with complexity” in the financial world, they ended up trading trepidations about an uncertain future.
““My biggest fear is there’s one more geopolitical escalation and there’s a market event,” Christian Sewing, chief executive officer of Deutsche Bank, said Tuesday at the Global Financial Leaders’ Investment Summit in Hong Kong.”
“Central banks can’t go bust, but they’re haemorrhaging money.
“The world’s oldest central bank is in need of a government bailout. Sweden’s Riksbank, founded in 1668, has asked for a taxpayer recapitalisation” worth $7 billion to plug losses racked up in the past two years… the prospect of years of losses is… damaging to central bank credibility…”
“The Big Problem With Government Debt Isn’t What You Think.
“Even if savers are happy to absorb mounting public-debt piles, today’s financial plumbing may be too creaky to bear it… Investors are worried that Western governments are issuing more bonds than investors can buy. Whether the system that transacts in those bonds can bear the load could be a much more urgent issue.”
https://www.wsj.com/finance/the-big-problem-with-government-debt-isnt-what-you-think-b876c198
“US debt interest payments surge past $1 trillion yearly pace, worsening concerns about massive borrowing.
“US annualized debt interest payments crossed $1 trillion in October, according to a Bloomberg analysis. The cost of debt has doubled in the past 19 months as federal deficits balloon. High interest rates have made borrowing more expensive, adding pressure on US debt.”
“Bond-market crash leaves big banks with $650 billion of unrealized losses as the ghost of SVB continues to haunt Wall Street…
“The brutal Treasury-market meltdown has hit some of the largest financial institutions hard, dragging down the share prices of big names such as Bank of America and fueling fears that the turmoil triggered by SVB’s bankruptcy may not be over just yet.”
“Bank caution to tighten the squeeze on the US economy.
“The Federal Reserve’s Senior Loan Officer Opinion Survey shows banks have tightened lending standards further while households and businesses remain wary of taking on additional borrowing. Given how important credit flow is to the US economy it makes it all the more likely that the economy will continue to slow…”
https://think.ing.com/articles/bank-cautions-tightens-the-squeeze-on-the-us-economy/
“Heard through the grapevine: one of the largest commercial mortgage brokers in the country was raided over the weekend.
“Fraud was found in loans they’d sent to Fannie Mae. This could now trigger a chain reaction of buybacks and less liquidity among Fannie lenders.”
https://twitter.com/DallasAptGP/status/1721664682044342576
“The [US] economy is great, why are people ”feeling” so poor?
“Well – how is this for a feeling? Since April 2020: 1) Inflation up a cumulative 20%; 2) But median wages up only 12%; 3) Monthly mortgage instalments to buy the median house: up from $1000 to $2300 (!)”
https://twitter.com/MacroAlf/status/1721856848180224218
“Americans now owe $1.08 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
“Credit card balances spiked by $154 billion year over year, notching the largest increase since 1999, the New York Fed found.”
“S&P Warns About Subprime Auto Bonds From Flagship, CarFinance.
“Subprime bonds backed by Flagship Credit Acceptance LLC and CarFinance Capital LLC loans have been placed on negative outlook due to their worse-than-expected performance, ratings firm S&P Global Ratings said in a note.”
https://finance.yahoo.com/news/p-warns-subprime-auto-bonds-222006388.html
“The obscure statistic warning of a thumping recession for Britain…
“…a small band of economists fear that a slump in the money supply is the clearest sign yet of the economy facing a serious recession. To them, it signals that inflation will be crushed so completely that Britain instead risks falling into a deflationary trap.”
https://www.telegraph.co.uk/business/2023/11/08/falling-money-supply-warning-recession-britain/
“NHS hospital declares ‘major incident’ after maternity ward suffers blackout following flooding…
“An NHS hospital has declared a major incident and evacuated its maternity ward after it lost power throughout the entire building. The blackout at Blackpool Victoria Hospital Women’s and Children’s Unit comes after severe flooding took place overnight.”
“[UK] Shoppers braced for broccoli shortages after washout October…
“Shoppers are facing a broccoli shortage after supermarket supplies were hit by wet weather, growers have warned. Broccoli stocks have fallen over the last month after poor weather impacted yields and farmers planted less because of financial pressures.”
https://www.telegraph.co.uk/business/2023/11/07/broccoli-shortages-at-supermarkets/
“Euro zone recession fears harden.
“The downturn in euro zone business activity accelerated last month as demand in the dominant services industry weakened further, a survey showed on Monday, suggesting there is a growing chance of a recession in the 20-country currency union.”
“Police clashed for a second night Tuesday with protesters who oppose negotiations between Spain’s acting government and Catalan separatist parties over a possible amnesty for thousands involved in Catalonia’s independence movement.
“Several protestors in Madrid waved Spanish flags and shouted insults against the acting prime minister, Pedro Sánchez, and some of them self-identified as “nazis” in chants.”
“German chancellor Olaf Scholz agrees ‘historic’ stricter migration policy.
“After a marathon session of talks in Berlin that continued into the early hours of Tuesday, Scholz said the measures would help speed up asylum procedures, restrict social benefits for migrants, and provide more federal funding for local communities.”
“Italy signs accord to send migrants to Albania, in deal slammed by rights groups.
“Italy will build two detention centers in Albania to house migrants trying to reach its shores, Prime Minister Georgia Meloni said Monday, in an attempt to control migration figures that have almost doubled in the year since she took office.”
https://edition.cnn.com/2023/11/07/europe/italy-albania-migrant-refugee-deal/index.html
“China’s Central Bank Vows Liquidity Help for Debt-Laden Regions.
“China will provide emergency funding to heavily indebted local governments as needed, central bank Governor Pan Gongsheng said — comments that underscore the importance authorities place on the problem.”
“Falling pork prices threaten to push China back into deflation…
“The price of pork in China, which is the world’s largest producer and consumer, has long followed a boom-and-bust cycle as smaller farmers pile into the market in response to rising demand. That leads to oversupply and triggers sharp price falls, forcing the same farmers to retreat.”
https://www.ft.com/content/058df2fe-ae7a-4be8-93c6-ca9cb46d3184
“Mexico implements emergency cash plan after hurricane.
“Mexico’s central bank, commercial lenders and other government authorities have activated emergency plans to provide banknotes after a hurricane struck coastal areas. The Bank of Mexico (Banxico), has also authorised relief for credit card debt.”
“Rebel fighting cuts power lines to Congolese city of Goma…
“Virunga National Park, which operates the network that supplies about 80% of Goma’s electricity, said on Monday that clashes between Congo’s army and the M23 rebels had severed the main power lines to Goma, a city of over 2 million people and the capital of North Kivu province.”
https://www.reuters.com/world/africa/rebel-fighting-cuts-power-lines-congolese-city-goma-2023-11-07/
“Darfur refugees report new spate of ethnically driven killings.
“People fleeing to Chad have reported a new surge in ethnically-driven killings in Sudan’s West Darfur as the paramilitary Rapid Support Forces (RSF) took over the main army base in the state capital, El Geneina. On Tuesday, a Reuters reporter saw a trail of men crossing from Darfur into Chad at Adre…”
“Israel plans ‘indefinite’ controls over Gaza, says Benjamin Netanyahu…
“Netanyahu told ABC News on Monday that Israel would maintain an indefinite grip over Gaza, which is home to 2.3mn Palestinians, to ensure its own security. It was his first explicit comments on the country’s plans for the Palestinian enclave after its war with Hamas.”
https://www.ft.com/content/bdd6b3c7-baae-4cc6-81e7-e6b42504d18d
“UK withdraws some embassy staff from Lebanon and tells nationals to leave.
“The Foreign Office has withdrawn some embassy staff from Lebanon and is advising British nationals to leave the country while they still can amid increasing concern about violence and unrest connected to the conflict in Gaza.”
“‘There Is Nothing Here’: Afghan Refugees Forced From Pakistan Struggle To Find Shelter.
“Nasrallah has spent days in a crowded makeshift camp for Afghan refugees returning from neighboring Pakistan. Like thousands of other returnees, he does not have proper shelter and sleeps out in the open with his family.”
https://www.rferl.org/a/afghanistan-refugees-pakistan-struggle-shelter/32675062.html
“The World’s Broken Food System Costs $12.7 Trillion a Year…
“According to a report from the Food and Agriculture Organization of the United Nations (FAO), the total hidden costs of the world’s food system add up to $12.7 trillion dollars—roughly 10 percent of global GDP.”
https://www.wired.co.uk/article/hidden-cost-world-food-system
“Global rice markets are in crisis amid ‘artificial’ shortage…
“Rice is a crucial staple for over half the global population and the world is bracing for its most significant shortage in 20 years. India’s export ban on rice is reverberating through global rice markets, threatening food security if developing nations cannot afford or access rice.”
https://www.cnbc.com/2023/11/07/global-rice-markets-are-in-crisis-amid-artificial-shortage.html
“Extreme weather pushes global wine production to lowest level in more than 60 years.
“Global wine production has fallen this year to its lowest level since 1961 as vineyards were pummelled by extreme weather events, the International Organisation of Vine and Wine (OIV) has said. Output reached 244.1 million hectolitres, down seven percent from 2022…”
“‘Insanity’: petrostates planning huge expansion of fossil fuels, says UN report…
“The world’s fossil fuel producers are planning expansions that would blow the planet’s carbon budget twice over, a UN report has found. Experts called the plans “insanity” which “throw humanity’s future into question”. The energy plans of the petrostates contradicted their climate policies and pledges, the report said.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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I found this analysis very astute,
https://consciousnessofsheep.co.uk/2023/11/06/rope-a-dope/
Thank you, Rain, very well written and seems to be how it is unfolding
It really is a great article, here’s a summary for those short on time (as if we all aren’t…. right?)
The article draws comparisons between geopolitical and economic strategies and boxing tactics, using the 1974 “Rumble in the Jungle” fight between Muhammad Ali and George Foreman as an analogy.
It discusses how the West, particularly the US, has overestimated its economic and military strength in recent years, much like Foreman overestimated his punching power against Ali.
The West’s economic sanctions against Russia have backfired, weakening Western economies more than Russia’s. Meanwhile countries like China and India maintain trade with Russia.
The West is unprepared, politically and economically, for the turmoil of a major economic downturn, unlike more authoritarian regimes like China and Russia.
The West’s declining economic dominance since 1945 has reduced its ability to wage economic warfare through sanctions and embargoes.
The West drove China and Russia together into alliances like BRICS, which now represent most non-Western countries. This reduced the West’s global economic dominance.
The West sacrificed Ukraine through a proxy war with Russia, but this has not gone as planned militarily or economically.
Internal political divisions have weakened the West, and will make it harder to cope with economic turmoil. Authoritarian regimes may weather an economic crash better.
Tim Watkins’ analyses are generally excellent, although he does often by inference downplay climate change:
“While the UK believes itself to be a pillar of virtue by sacrificing its economic base in order to lead the world toward the green nirvana, in reality the rest of the non-western world are laughing at us.”
The UK’s net zero drive may be a pseudo-solution and an act of economic self-harm but at least there is an acknowledgement of the problem and the intention, however systems-illiterate, to do something about it. Not doing anything at all may make more economic sense in the very near-term but is of course equally ridiculous.
As a boxing fan, I enjoyed the rope-a-dope analogy. Like Sugar Ray Leonard, Ali was so handsome and personable that it was easy to overlook what an absolute monster he was in the ring. Even over and above his remarkable physical gifts (which faded significantly after his three-year hiatus from the ring), he had truly superhuman heart and will to win. Tyson summed him up:
“Ali was a f****** animal. He looks more like a model than a fighter but what he is, he’s like a Tyrannosaurus Rex with a pretty face.”
Pan : “The UK’s net zero drive may be a pseudo-solution and an act of economic self-harm but at least there is an acknowledgement of the problem and the intention, however systems-illiterate, to do something about it. Not doing anything at all may make more economic sense in the very near-term but is of course equally ridiculous.”
Sorry Pan – “Not doing anything at all…”
I don’t believe it is ridiculous – I believe its gone so far, that there’s nothing left to do, but to let Nature take its course, – as it will, no matter whether govts do “acknowledge the problem”, or don’t.
Acknowledging the problem may even make it worse, as the public cry out more for govts to “do something”, when no govt can deliver on it.
And people will not reduce their current 1st world lifestyles unless they are forced to, and such force will only increase social unrest. So countries wanting to “manage” this process of deindustrialisation, economic contraction, or just minimise the worst impacts, or provide some damage control, will have to make strategic sacrifices (overtly or covertly, intentionally or unintentionally) on behalf of their populations.
I believe it was you Pan, who introduced me to the term of “Strategic Sacrifice” ?
in relation to last summer’s Chinese floods, where China opened massive flows of emergency floodgates to increase catastrophic flooding in downstream regions, to divert part of the flooding from Beijing. I’ve been thinking of that term ever since 🙂
US and UK have been doing these “strategic sacrifices” for many years, look at the dead and/or dying cities, towns and councils in your own part of the world.
Will Derna in Libya be rebuilt? How is Gaza, or even Ukraine going to be rebuilt? Will Acapulco in Mexico? Unlike the aftermath of WW2, particularly for Europe, when rebuilding and reconstruction of the damage of the war was not only feasible, but with cheap abundant energy, helped economies go into boom-boom party times for a generation.
Zip said “The rest of his piece is all geopolitical drivel about Brics and Russia….And how long is this ‘thousand-year empire’ of Putin and China going to last? ”
Ha! Hopefully long enough for me to live out my final years in some modest comfort 🙂
I have been following “Think BRICS” podcasts for awhile now – and learned another great term — “Strategic Patience” 🙂
Like Mohammed Ali – in geopolitical (and military) policy,
– ie don’t over-react, don’t take the USA’s war-baiting, economic baiting, or attempts at overt diplomatic (and/or covert) psyops in Divide-and-Conquer contacts. Putin’s speech at the last BRICS Conference was all about possible future projects for other and the new member countries to consider and think about – in energy and agriculture – localised solutions using new and/or old technologies, whatever works best in whatever region, along the belt-and-road initiatives.
Strategic Patience & Strategic Sacrifice & Strategic Energy use of remaining reserves – let the G7 implode on their own, or not *shrug* – we’ll get on with saving as much as we can for as many as we can, during the population crashes to come, to reduce the ‘overshoot’. Lower populations, will lower emissions, and may even reach Net Zero by 2050.. who knows?
There was also a clip, of informal discussions on ‘Human rights’, and paraphrasing they were noting the hypocrisy of the US and the G7, coming into their countries to lecture them on ‘human rights abuses’, free speech, censorship, media manipulation etc. As for authoritarian vs non-authoritarian – false dichotomy methinx – the only difference is one is Overt, the other Covert – you can guess which is which, no?
“I don’t believe it is ridiculous – I believe its gone so far, that there’s nothing left to do, but to let Nature take its course, – as it will, no matter whether govts do “acknowledge the problem”, or don’t.”
Perhaps better to say then that the joke is on us all.
Oh yes the consciousness or subconscious of sheep and a boxing match between… Ali and er… who was it again?
Always very weak this kind of easy geopolitical fodder….
Muhammad Ali is beaten black and blue and long since numb and demented and, by the way, by the way, has been stone dead for about 8 years….
None of that lasted very long by the way…. in 2016 he was dead
…..Ali dominated the first three rounds, treating the smaller Frazier to some nippy direct punches that made the champion’s face swell. In the fourth round, Frazier took control. With his famous left hook, he taunted Ali and pinned him against the ropes to hit him heavily on the body. The fight was evenly matched until the 11th round, Frazier had Ali cornered and hit him with a crushing left hook that almost floored Ali and left him hanging in the ropes. Ali survived the round, but from then on Frazier seemed to have the upper hand. Ali tried to fight his way back over the next three rounds, but Frazier was overwhelmingly ahead on points. Early in the 15th round, Frazier planted a spectacular left hook in Ali’s face that sent the challenger down. It was only the third time Ali had gone down in a fight. Ali, whose right jaw had taken on grotesque forms, was quick on his feet but badly beaten. Despite several ragged hits from Frazier, Ali survived the round. After a few minutes, the unanimous judges’ decision followed: Frazier retained his world title. It was Ali’s first loss in a pro match…..
A nice concept of ‘the consciousness of sheep’… is that we have no consciousness about our future being
The rest of his piece is all geopolitical drivel about Brics and Russia….And how long is this ‘thousand-year empire’ of Putin and China going to last? I would say if you take a closer look at Russia’s raw materials and energy resources neetm about 30 years! That’s anmightythe timeframe they will be able to export their fossil reserves to finance a weird war that by now their entire war machine is breaking down on….
Economic sanctions… who is talking… the rosy future of South Africa and Brazil to name just two Brics countries… if you have such economic friends, you don’t need enemies, etc etc.
Perhaps this will be a better metaphor:
https://www.youtube.com/watch?v=vejzMjAY-AU
😂🤣💯🎯