“From Lebanon to the Red Sea, a Broader Conflict With Iran Looms. With its proxies attacking from many vantage points and its nuclear program suddenly revived, Iran is posing a new challenge to the West — this time with Russia and China on its side…
“American officials say Iran does not have control over many of its proxies, and the intensity of the attacks far from the Lebanon-Israel border could well be the spark for a larger conflict.”
“The tinder box in the Middle East.. A series of incidents in the past week has brought the region to the brink.
“The US… now finds itself increasingly drawn in, its forces under attack in Iraq and its support for Israel wrecking its reputation across an Arab world enraged by the devastation of Gaza.”
“Israel says Gaza fighting could last a year, amplifying fears of regional war…
“Israeli defence officials and former senior intelligence officers have said they expect fighting in Gaza to continue for at least a year, raising the prospect of thousands more civilian casualties, a deepening humanitarian crisis and a continuing grave threat to regional stability.”
“Are the Houthis dragging us toward a global trade crisis? The attacks on Red Sea ships are having a dangerously outsized impact on the global economy…
“If the Houthis’ attacks have demonstrated anything, it is that the disruption of just a single choke point can have vast global ramifications. The foundations of our global economy are clearly far more precarious than we tend to realise.”
“Chinese shipping giant reportedly suspends trips to Israel as Red Sea tensions mount…
“To avoid strikes by the Yemen-based militants, carriers have already diverted more than $200 billion in trade over the past several weeks, with major shipping companies such as Maersk and Hapag-Lloyd pausing shipping through the Red Sea until further notice.”
“China imposes sanctions on US defence giants amid growing Taiwan tensions.
“In response to the recent approval of a $300 million arms sale to Taiwan by the US State Department, China announced on Sunday that it would impose sanctions on five American military manufacturers, Reuters reported.”
“U.S. rushes to revive nuclear weapons industry as global tensions mount…
“The U.S. possesses more than 5,000 nuclear warheads, but many of them were manufactured during the Cold War. Plutonium pits, which are mounted on warheads, may have deteriorated over time. Washington considers replacing them with new ones to be an urgent task…”
“The $34 trillion mountain of national debt is a ‘boiling frog’ situation for the US economy, JPMorgan warns.
“The US’s $34 trillion debt mountain might be a “boiling frog” phenomenon for the economy, as higher deficits and ballooning debt servicing costs could easily become unsustainable, JPMorgan warned.”
“Americans are racking up more ‘phantom debt’ — why that’s a problem…
“Over the holidays, the use of installment payments hit an all-time high, up 14% year over year… “Because no central repository exists for monitoring it, growth of this ‘phantom debt’ could imply total household debt levels are actually higher than traditional measures,” said Tim Quinlan, senior economist at Wells Fargo…”
“Republican voters back Donald Trump overwhelmingly to manage US economy.
“Two-thirds of Republican voters say they trust Donald Trump more than any other GOP presidential candidate to manage the US economy, according to an FT-Michigan Ross survey that underscores his dominance on bread-and-butter issues a week before primary season gets under way. The findings are particularly problematic for Nikki Haley, who has surged in the polls to become the biggest threat to the former president.”
“The UK’s Economic Outlook Is Riding on Election Politics…
“The UK economy’s mixed report card for 2023 amplifies this year’s tension between what election politics is likely to deliver and what the economy needs… Given the possibility of further stagnation in 2024, the UK risks falling deeper into a low growth/productivity hole that gets harder to escape.”
“‘The mood is heating up’: Germany fears strikes will play into hands of far right…
“The symbolism that German farmers chose to express their discontent with the government in the first days of the new year was as unambiguous as it was ominous: by the side of rural roads across the country, there were sightings of makeshift gallows dangling traffic-light signs, a reference to the colours of the three governing parties.”
“France requires more than the six new nuclear plants currently planned and possibly needs to build more than 14 new plants, its energy minister said, just days before a parliamentary debate begins on the issue.
“Speaking to weekly newspaper La Tribune Dimanche, Energy Transition Minister Agnes Pannier-Runacher said it was vital to build more nuclear reactors…”
“A nuclear power station in Japan has reported an oil leak after being shaken by a powerful earthquake…
“The Shika power station is 65km (40 miles) from the epicentre and had already reported temporary power outages, oil leaks at the transformers and water spill-over from nuclear fuel pools.”
“A top executive of China Evergrande’s electric vehicle company has been detained by police in the latest sign of trouble for the world’s most heavily indebted property developer.
“China Evergrande New Energy Vehicle announced the detention of Liu Yongzhuo, its vice chairman and an executive director… Its shares plunged nearly 11% after they resumed trading later in the day.”
“Zhongzhi Enterprise Group: Chinese shadow bank files for bankruptcy.
“A major Chinese shadow bank has filed for bankruptcy on the grounds it was unable to pay its debts. On Friday, a Beijing court accepted the application from Zhongzhi Enterprise Group (ZEG), which has lent billions to real estate firms.”
“Xi’s Solution for China’s Economy Risks Triggering New Trade War.
“China’s shift toward high-value add manufacturing threatens to further raise trade tensions with the US, Europe and others… China’s… efforts to retain lower-end industries narrows the space for nations like Vietnam and Indonesia that would otherwise benefit from China’s move up the value chain.”
“Bond Sales Hit Record Pace as Emerging Markets See Year of Risks.
“Developing-nation borrowers are rushing to sell debt, taking advantage of increased appetite for new bonds to lock in costs as traders continue to flip flop over when the Federal Reserve will begin lowering interest rates… Meanwhile, the debt crisis lingers. Ethiopia became the latest sovereign to miss payment late last year…”
“North Korea has threatened an immediate military strike against South Korea in response to any “provocation”.
“Kim Yo Jong, the powerful sister and key ally of leader Kim Jong Un, made the threat on Sunday, as Pyongyang reportedly fired artillery shells near its border with South Korea for the third day in a row.”
“Somalia ‘nullifies’ port agreement between Ethiopia and Somaliland…
“Somalia’s president signed a bill on Saturday voiding a preliminary agreement for Somaliland to provide landlocked Ethiopia with port access to Somaliland’s coast, in a largely symbolic move intended to rebuke both parties over a deal that has inflamed tensions across the Horn of Africa.”
“Bangladesh: polling booths set alight on eve of general elections. Four people also killed in suspected arson attack on a train, which police say was aimed at scaring people before vote…
“…voting comes amid an increasingly polarised political culture led by two powerful women: the prime minister, Sheikh Hasina, and the former prime minister, Khaleda Zia, an opposition leader who is under house arrest.”
“Bhutan holds general election as economic crisis hits ‘national happiness’…
“Foremost in the minds of many are the struggles facing the kingdom’s younger generation, with chronic unemployment and a brain drain of migration abroad. “We don’t need more new roads or bridges,” farmer Kinley Wangchuk, 46, told AFP news agency. “What we really need is more jobs for young people.””
“The Islamic State group claimed responsibility for a minibus explosion in the Afghan capital late Saturday that killed at least five people.
“The Sunni militant group said its members detonated an explosive device on the bus carrying Shiite Muslims, whom they called disbelievers, in a statement released shortly after the explosion Saturday.”
“The nightmare of the Islamic State resurfaces in Iran…
“Some analysts have warned that, due to increased anti-terrorism pressure from the Taliban, ISIS-K may have opted not only to commit fewer — albeit more powerful — but also more regional attacks. In this regard, Iran faces the most danger…”
“Doomsday prophecies are back in fashion.
“There are signs that the current vogue for doomsday prophecies is having a more demoralising effect than previous ones.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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