A big thank you to October’s sponsor, Rusty Flanagan.
“Asset-Backed Debt Sales Top $313 Billion, Beating Post-Financial Crisis Record…
“Sales of debt backed by everything from auto loans to airplane leases to Subway franchise fees have hit their highest level since the financial crisis, as banks try to meet new capital rules and insurance companies clamor for higher-yielding debt.”
“Another subprime crisis in the making? American banks sitting on $750 billion in losses on realty debt-related securities…
“Even though there are multiple safety valves in place by the Fed at this point, that may still not be enough to prevent a financial crisis if various market factors keep mounting due pressure, with the US elections’ uncertainty taking the primary lead in this issue.”
“Ninety-five years after the crash, Americans have learned nothing…
“…certain challenges—such as high levels of corporate and personal debt, rising wealth inequality, and the rapid growth of speculative investment products—bear similarities to the conditions preceding the 1929 collapse.”
https://njtoday.news/2024/10/29/ninety-five-years-after-the-crash-americans-have-learned-nothing/
“Why are America’s restaurant chains going bankrupt?
“…”You have the Covid hangover, labor costs,” said one executive. Some families have “pulled back on dining out,” said the Journal. But business decisions have also played a role. “High interest rates have hurt companies that gave priority to growth over profit.””
“Gold marches to record as U.S. election jitters fuel safe-haven rush.
“Gold hit an all-time peak on Wednesday as investors flocked towards the safe-haven metal less than a week before the U.S. presidential election, while they awaited economic data for clues on the Federal Reserve’s rate stance.”
“Bond market braced for rise in UK debt issuance to £300bn this year…
“Global investment banks expect UK debt sales this year to rise close to £300bn… That figure would be the highest ever apart from the extraordinary borrowing in 2020-21 to fund Covid emergency schemes.”
https://www.ft.com/content/432166d7-d0c4-4410-83cd-5ddc40021c4f
“Why ARE Victorian diseases returning? [UK]
“Dickensian diseases such as scabies, scurvy and syphilis are staging a comeback in modern Britain. The UK is currently gripped by an outbreak of the highly infectious skin bug scabies and the British Association of Dermatologists issued an alert about the ‘unusually high’ rates.”
“End of the road for electric cars: Shocking chart reveals how EV sales have slumped around the world – with Volkswagen the latest carmarker forced to close its factories as a result…
“…it seems the electric revolution – deemed essential to curb carbon emissions – is running out of road.”
“Profit slump dampens mood at Mercedes…
“…with the economic downturn in the People’s Republic, particularly in the real estate market, the affluent Mercedes customers have unexpectedly become more frugal… Additionally, competition from domestic automakers is growing in China.”
“Workers launch strikes as Germany frets over industrial future.
“Thousands of German workers launched nationwide strikes to press for higher wages on Tuesday, compounding woes of companies worried about staying globally competitive as high costs, weak exports and foreign rivals chip away at their strengths.”
“Kremlin warns German weapons factory is legit target for Russia’s military…
“Earlier this year, Rheinmetall’s CEO Armin Papperger — the most powerful weapons tycoon in Europe — was the subject of an assassination attempt by Russian operatives that was foiled by the United States and Germany.”
“Moscow ramps up sabotage attacks in Poland: security agency.
“Poland has seen an escalation of acts of sabotage by Russian black operation teams, including targeting civilian infrastructure, according to Poland’s Internal Security Agency.”
“Finland orders seizure of Russian assets at request of Ukrainian oil and gas company…
“The court’s decision followed a 2023 ruling by the Permanent Arbitration Court based in The Hague which ordered Russia to pay roughly €4.6bn in compensation to the company after seizing its assets illegally during the 2014 occupation of Crimea.”
“Russia’s Arctic LNG 2 Plant Halts Amid Tightening US Sanctions…
“Commercial liquefaction at the facility was halted due to high inventories as the plant cannot freely export cargoes, said the people, asking not to be named discussing information that isn’t public.”
“Russia’s Putin launches drill of nuclear forces simulating strikes…
““Given the growing geopolitical tensions and the emergence of new external threats and risks, it is important to have modern and constantly ready-to-use strategic forces,” Putin said on Tuesday as he announced the exercise.”
“Australia to ramp up missile production as Indo Pacific enters new missile age…
“Minister for Defence Industry Pat Conroy said in a speech on Wednesday that Australia was increasing its missile defence and long-range strike capability, and would cooperate with security partners the United States, Japan and South Korea, to contribute to regional stability.”
“China warns of deep-sea spying devices, underwater ‘lighthouses’ that guide foreign submarines…
“The ministry said it had uncovered devices that had been hidden on the ocean floor and were sending back information that could “pre-set the field for battle,” in an article on its official WeChat account, China’s most popular social media app.”
“China loses third of billionaires as economy falters…
“In the past year alone, the number of dollar billionaires in China declined by 16 per cent, when the renminbi depreciated only 2.5 per cent against the dollar. The list has also undergone rapid churn…”
https://www.ft.com/content/0895e824-baee-4bcc-bb68-28558050dd48
“China considers over $1.4 trillion in extra debt over next few years…
“China’s top legislative body, the Standing Committee of the National People’s Congress (NPC), is looking to approve the fresh fiscal package, including 6 trillion yuan which would partly be raised via special sovereign bonds.”
“China’s Export Ban is Causing Shortages of Medicine, Fuel And Food in Myanmar…
“Some areas of Myanmar are running out of food, medicine and consumer goods due to China’s ban on exports to the country following a rise of fighting along its border in Kachin State and northern Shan State…”
“Saudi Arabia Turns to Debt Markets for Vision 2030 Financing…
“A month ago, Saudi Arabia raised $3 billion from a fresh bond sale via its state oil major Aramco—the second for the kingdom since July—in response to lower oil prices. That latest bond has pushed Saudi’s total bond issuance this year to some $50 billion; Vision 2030 is a costly diversification project.”
“Once a refuge, southern Lebanese city of Tyre empties as airstrikes rain down…
“Now, Tyre was no longer safe. The day after Israel issued its evacuation order, the city was almost entirely empty. Burnt-out cars, flipped upside down by the force of a blast, lined the main thoroughfare of the city.”
“‘No one is coming to save them’: blackouts hide horrors of siege of north Gaza…
“Communication between hospitals, health workers and aid agencies is becoming sporadic, and ground fighting has made travel increasingly dangerous, making it hard to coordinate care and treatment and accurately collect casualty data.”
“Fierce fighting has gripped Sudan. Hospitals are in the line of fire…
“FT satellite analysis of a 15 sq km area of Omdurman, Sudan’s second-largest city, shows how hospitals have been repeatedly hit amid widespread devastation caused by over 2,500 points of shelling damage.”
https://ig.ft.com/sudan-hospitals/
“Blackout cripples northern Nigeria after jihadist attack.
“Northern Nigeria has been plunged into darkness for nearly two weeks. Engineers have been unable to carry out repairs due to insecurity. The Transmission Company of Nigeria says gunmen are occupying the area where the line is damaged.”
https://www.modernghana.com/news/1352740/blackout-cripples-northern-nigeria-after-jihadist.html
“Coup-hit Niger was betting on a China-backed oil pipeline as a lifeline. Then the troubles began…
“Analysts say the crises could further hurt Niger, one of the world’s poorest countries which funds most of its budget with now-withheld external support in the aftermath of the coup.”
“Burkina Faso putting civilians at risk amid conflict with rebels…
““The massacre in Barsalogho is the latest example of atrocities by Islamist armed groups against civilians whom the government has put at unnecessary risk,” said Carine Kaneza Nantulya, HRW’s deputy Africa director.”
“Bloody attack in Mali’s capital shows al-Qaeda’s shifting strategy…
“As Islamist militants spread south, group leaders have made clear their fight is with Mali’s government — and the Wagner mercenaries protecting it… Increasing attacks by Islamist groups have made this region a new epicenter for extremist violence…”
https://www.washingtonpost.com/world/2024/10/29/mali-bamako-jnim-attack-qaeda/
“Government cuts spark renewed protests in Argentina…
“On Tuesday, demonstrators gathered at the Obelisk in the Argentine capital to march towards the Ministry of Deregulation and Transformation of the State, headed by Federico Sturzenegger, responsible for implementing the Milei government’s policy aimed at shrinking the state.”
https://efe.com/en/latest-news/2024-10-30/government-cuts-spark-renewed-protests-in-argentina/
“Bolivia’s Economy Is Seen Nearing Collapse by Top Business Group.
“Bolivia’s economy is “on the brink of collapse” as companies go bankrupt amid road blockades, fuel shortages and a scarcity of foreign currency, according to a business leader in the nation’s biggest city. An “accumulation of unresolved problems” is asphyxiating the country…”
“Looming Debt Spiral in Emerging Markets Tests IMF and World Bank Safety Net…
“The liquidity crunch means that governments are spending more to service debt, limiting what they can invest in infrastructure, education and health, as well as climate-change adaptation.”
“Food, Fuel, and Finances: How to Prepare for an Economic Collapse…
“Try camping in your backyard or practicing living “off the grid” for a day. Understanding how to handle the basics without modern comforts can give you confidence and resilience if resources become restricted.”
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You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
Thank you for another compelling compilation! Your style of information organization is easy to following and flows nicely as your track across the globe.
Thank you for the kind compliment, T. I do try to make the threads “make sense”, as it were.
What a mess!
… “IF resources become restricted!?”
Not surprisingly, MSN seems a tad out of touch.
If I’m not mistaken, the entire point of imposing a sanctions regime is to deliberately restrict resources … and when one of those resources is oil, it is the entity implementing the sanctions that restricts the resource, but not to their enemies, who are producing as much as ever for their own needs, but to themselves, as is currently the case with the sanctions imposed on Russian oil.
Rob, I think the MSN article is talking in more localised terms about grid failures, supply-chain failures and such? Sanctions could certainly feed into those outcomes… I may be totally misunderstanding your comment.
Please forgive me if I am quiet in the comments section this evening. It’s haircuts tonight, pumpkins need carving and my youngest absolutely must look like Shaun from “Shaun of the Dead” for Halloween.
Hello Pan
Things are getting more and more exciting. The French are failing to make cuts. Discussions on the 2025 budget so far only come down to spending more.
Next week, the French auto industry’s Stellantis will come out with a three-year forecast. Right now, there is still a lot of ‘part-time unemployment’ and all sales are heavily disappointing, just as in Germany the end of the car industry in the EU is well understood.
These will be bitter pills.
From 8 November, farmers will take to the streets again and network operator Enedis is preparing for a temperature rise of as much as 4 degrees. All pipes have to go underground is about tens of billions!
To pick up the discussion on price rise and demand destruction yet again today, an interesting article on China, refining, steel and blast furnaces. (probably also applies to copper)
China a striking example of how economic factors strongly influence demand for oil and other raw materials. China’s oil and steel industries are suffering significant losses due to a combination of demand destruction and high prices. While rising oil prices often lead to greater demand destruction, China’s demand for oil and steel appears to be affected not only by price increases but also by structural demand issues, such as a prolonged property crisis and the rapid adoption of electric vehicles, which reduce demand for refined oil products such as petrol.
China’s imports of commodities such as iron ore, oil, and copper remain volatile. When prices are low, purchases are made for stockpiling, but when prices rise, we see demand falls. This pattern of strategic buying at low prices and unwinding at high prices seems to be a consequence of a deliberate demand destruction policy to control costs and protect margins. At the same time, the Chinese government’s recent stimulus measures, such as interest rate cuts by the People’s Bank of China, demonstrate an active effort to boost demand. The central bank is lowering the cost of borrowing to stimulate investment and consumption, but the effects remain uncertain given low inflation and slowing economic growth.
The context of weak domestic demand and increased inventory accumulation suggest a temporary brake on price increases. This supports our theory discussed earlier: when prices become unaffordable, markets respond with demand reduction or alternatives. China’s situation underscores the paradox of rising commodity prices and falling demand: once stimulus and economic growth increase demand, the risk of price pressure from scarcity persists.
https://oilprice.com/Energy/Energy-General/Chinas-Oil-and-Steel-Industries-Are-in-the-Red-What-Now.html
Zip, thank you for the interesting updates.
I did not know that re the French budget. I had the impression that Barnier had managed to start tightening the purse-strings. You wonder how much patience bond investors will have. I saw that Moody’s downgraded France’s outlook from “stable” to “negative” last week.
Gilt-investors initially seemed to like our UK budget, announced today, but then, on reflection, decided that actually they didn’t.
Hi Zip, nice synopsis. It makes me think that when a country wants to be the world’s manufacturer, when there demand destruction, all the usual tricks to spur demand fail because it’s global demand you now need to spur, and the usual bag of Central Bank tricks only work in your own economy.
If, after first reading Limits to Growth, you had been asked to come up with what a selection of headlines would look like as it began to become impossible to explain what was happening in any way other than that the predicted limits were being reached, then I think it would have looked very much like the mixture above.
Thank you, George. That is very much the story I am trying to follow in these threads.
Another good one from Art Berman. Not much hopium at all.
https://www.artberman.com/blog/dark-matter-unseen-forces-shaping-our-climate-and-future/
More fiat currency is the only way to save the global economy. The value of gold based on fiat currency is the best evidence of this Stupid Species’ stupidity.
Someone tell me how the value of all debt can be repaid.
Let’s not forget the sale of all assets that everyone thinks are worth so much. I think we are short a few dollars & there will be some bruised egos & empty wallets.
I particularly like how increasing amounts of currency grew on the money tree. Great gardeners!
Currency is the only line that is reality. The other 4 lines are great delusions. How in hell can – Deposits, All Commercial banks exist when one just looks at the Currency in Circulation line. I think I’ll go to the bank & get one of those Fictional Reserve Lending loans.
https://fred.stlouisfed.org/graph/?g=UGDg
New acronym: Fuck Yourself To Tears. 😉