“Central banks could soon turn their taps back on…
“Gold has just hit an all time high of $2,100 an ounce. Bitcoin… has soared back above $40,000 a unit, doubling in a year. Even the bond market is rallying.
“There is a stark message in those extreme price movements. It is not just that interest rates may have peaked as inflation starts to come under control. The markets are betting that central banks will soon have no choice but start printing money again to bail out bankrupt governments.”
“Central banks ‘not out of the woods’ in inflation battle – BIS…
“Central banks are proving “laser focused” in bringing inflation down, Borio added, but in a further sign of the softening rhetoric he said they needed to be “flexible and nimble” if a slowing global economy required it.”
“Global banks face negative outlook, property stress in 2024 – Moody’s…
“Sluggish global growth, a higher risk of borrowers defaulting on loans and pressure on profitability mean that banks face a negative outlook in 2024, credit rating agency Moody’s said on Monday. Prior rate hikes by central banks and rising unemployment in advanced economies will weaken asset quality…”
“Real estate 2024: get ready for the hard grind.
“Whatever happens to interest rates next year, finance costs are not returning to pandemic lows. That’s a big burden for investors, developers and contractors, as well as home buyers and owners in mortgage stress.”
“Companies Are Going Broke Gradually, Not Suddenly.
“Like a US recession or China’s post-Covid rebound, a wave of corporate defaults was anticipated this year — but didn’t happen. That doesn’t mean it won’t… Financial strength has been declining for a while, a trend that was only briefly interrupted by the attempted cleanup in the wake of the Global Financial Crisis in 2008.”
“Deflating ‘QT cushion’ may have raised red Fed flag…
“…these moves may matter an awful lot: both to U.S. bank credit going into next year’s economic slowdown as well as asset prices that many reckon feed directly off funding liquidity shifts in the system… the marriage of falling credit demand and supply could pack a greater punch to the U.S. economy next year than seen in the tightening process to date.”
“Collapsed US money supply is a threat to employment, growth, and inflation, Wharton professor Jeremy Siegel says.
“US money supply has seen its longest stagnation since World War II, according to Jeremy Siegel. The Wharton professor said the US now faces major recession, unemployment, and deflation risks. “You can’t really have a growing economy when the M2 money supply is decreasing,” Siegel told CNBC.”
“U.S. manufacturing activity has been in contraction territory for 13 months, according to the Institute for Supply Management’s November factory index — the longest such stretch since August 2000 to January 2002.
“November’s PMI remained flat at 46.7, although new orders ticked up 2.8 percent to reach 48.3. Nearly every subindex supporting the PMI read below 50, the demarcation line between contraction and growth.”
“U.S. and China diverge on how to avert military clashes.
“…the prospects for defusing tensions between the two countries and promoting deeper cooperation seem grim. The U.S. and China have opposing views on how to navigate bilateral relations; their approaches to preventing military confrontation are like oil and water.”
“Taiwan’s Big China ETF Bust Shows Extent of Financial Decoupling.
“Taiwan’s economic and financial decoupling from China has deepened with the near-collapse of what was once the world’s largest Chinese bond exchange-traded fund market. It’s the latest example of the widening gap in relations between the two economies…”
“China’s state banks stepped in to support yuan Tuesday, Moody’s downgraded China’s outlook.
“…major state-owned banks buying yuan and selling US dollars (by swapping yuan for dollars in the onshore swap market, then selling the dollars in the spot market) after Moody’s cut China’s outlook to negative in the afternoon the intervention gathered pace.”
“Wanxiang Trust: Another Chinese ‘shadow bank’ faces major financial trouble.
“Wanxiang Trust, an investment and asset management company in China, has reportedly missed payments on several investment products to investors, adding to fresh worries about the stability of the country’s shadow banking sector.”
“Australia’s economy slows to a crawl, consumer spending surprisingly weak.
“Australia’s economy barely grew in the third quarter as exports flagged and households – reeling from a surge in mortgage payments – were reluctant to spend, suggesting rate hikes were working to restrain demand.”
“English town halls face unprecedented rise in bankruptcies, council leaders warn.
“The financial crisis engulfing English local authorities will trigger an unprecedented increase in town hall bankruptcies in the coming months, local government leaders have warned, as they prepare to increase council tax bills and impose a fresh round of cuts to services.”
“‘Stock up on candles and battery-powered radios’: Deputy PM says UK must be prepared for catastrophe…
“He spoke ahead of the launch of a government website designed to encourage people to be ready for major incidents. These includes terrorism, natural disasters, cyber attacks or even another pandemic like coronavirus.”
“Dublin Riots Expose Irish Frustration at Housing, Cost-of-Living Crisis…
“The riot was spurred in part by disinformation and online rumors about a possible foreign attack, despite the lack of any proof. But the agitators harnessed a deeper set of grievances among young people, struggling with spiraling prices and a desperate lack of affordable housing.”
“Ireland has admitted that it can no longer provide accommodation to all asylum seekers due to a severe shortage of emergency housing, and will hand out tents and sleeping bags where needed.
““Despite intensive efforts to source emergency accommodation, the Department (of Integration) is currently not in a position to provide accommodation to all international protection applicants due to the severe shortage,” said a statement sent to AFP on Monday.”
“More EU countries threaten to close Russian borders amid migrant surge…
“Latvia, Lithuania and Estonia are increasingly concerned after Finland last week shut all of its crossings with Russia for two weeks after undocumented migrants from crisis-hit countries in the Horn of Africa and Asia entered the Nordic nation.”
“Eurozone moves closer to recession…
“A closely watched survey of businesses in the single currency area remained in contractionary territory, according to the purchasing managers’ index. The monthly PMI for the eurozone was 47.6, below the 50 mark that indicates overall growth.”
“German cabinet tries to solve ‘no-debt’ crisis after court outlaws budget.
“You know it’s a crisis when Germany’s Green vice-chancellor cancels attending a climate summit. Robert Habeck, who’s also economy minister, was supposed to be at the COP28 summit this week in Dubai. Instead, he is in Berlin, wrangling with coalition partners…”
“Germany’s budget woes risk dampening its chipmaking ambitions.
“Germany’s budget crisis could affect plans to hand out billions of euros in government subsidies to chip companies, potentially stymying its hopes of playing a significant role in the global semiconductor industry.”
“Olive oil price skyrockets as Spanish drought bites…
“Spain is the world’s biggest olive oil producer, covering 70% of European Union consumption and 45% of that of the entire world. The lack of rain that this province and other olive-producing areas around Spain have been seeing therefore has an enormous impact on both the amount of oil being produced and its price.”
“South African economy contracts marginally in third quarter.
“The South African economy recorded a minor contraction in the third quarter of this year as output fell in the agriculture, mining and construction industries, statistics agency data showed on Tuesday. The 0.2% contraction in quarter-on-quarter seasonally adjusted terms was slightly larger than the 0.1% predicted.”
“Once lauded for opening borders to African refugees, South Africa is trying to clamp down on migrants ahead of next year’s elections.
“The government was forced to extend special residence permits for some nationals from Zimbabwe and Lesotho by two years after the appeals court barred it from rescinding them… Home Affairs Minister Aaron Motsoaledi is appealing the ruling, warning foreign nationals are placing an excessive burden on taxpayers.”
“Why record numbers of Rohingya refugees are making a ‘terrifying’ boat trip to Indonesia.
“Many fled to the Cox’s Bazar refugee camp in Bangladesh in the wake of a brutal 2017 campaign of ethnic cleansing waged by Myanmar’s armed forces — known as the Tatmadaw — but are now forced to flee again with conditions deteriorating in the camp.”
“Karabakh refugees in Armenia face uncertainty and poverty in exile…
“Alina Harutyunyan, 34, fled her village of Harutyunagomer – Qizilqaya in Azerbaijani – with dozens of others in the back of an industrial truck belonging to one of her neighbours. Now she, her husband and four children share one room on the ground floor of a derelict library.”
“Pakistan economy: Price spikes, political woes hit millions.
“…and there is more uncertainty on the horizon, with soaring inflation, energy prices due to increase further in January and a general election looming in February. Industrialists in Karachi… have even threatened to shut down production completely on 4 December, unless the government reverses unprecedented gas tariff hikes.”
“The World Food Programme said on Tuesday it had paused general food distribution in north Yemen due to limited funding and disagreement with local authorities over how to focus on the poorest there.
“Sanaa and northern Yemeni regions are under the control of the Iran-aligned Houthi group…”
“Oil CEO says blaming the energy industry for the climate crisis ‘like blaming farmers for obesity’.
“The burning of coal, oil and gas is by far the largest contributor to the climate crisis, accounting for more than three-quarters of global greenhouse gas emissions. “It’s our societal consumption that is the issue,” Majid Jafar told CNBC’s Dan Murphy on Tuesday.”
“World’s major oil producers spurn fossil fuel phase-out in net zero push…
“The Net Zero Tracker, an independent data consortium including Oxford University, said its findings laid bare the gap between the targets countries have set to avoid disastrous levels of climate change and their real-world plans to continue producing CO2-emitting energy.”
“Global wind power outlook takes hit from US weakness, China slowdown.
“The global wind power sector will add less capacity in the next decade than previously expected due to financial trouble in the U.S. offshore wind industry and sluggish approval and project execution in China, consultancy Wood Mackenzie said on Tuesday.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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