“Over the past six weeks, as the country has been locked down, a staggering 30 million or around one in five American workers has been forced to file for unemployment benefits. It is all too likely that before the lockdown is lifted, the U.S. unemployment rate will peak at well above 20 percent of the labor force…
“With unemployment and excess capacity likely to remain unusually high for a prolonged period of time, we must now expect considerable downward pressure on wages and prices. Starting from a very low inflation rate, such downward pressure makes it all too likely that we will revisit the debt-deflation problems of the 1930s.
“Deflation would be the last thing that Jerome Powell now needs as he tries to kick start the economy with lower after-inflation interest rates. Indeed, he will very likely find that his efforts at cutting interest rates will largely be negated by falling prices…
“Needless to add, deflation will also make it difficult for the government to dig itself out of its deficit and debt problem. This is all the more to be regretted considering how parlous is the state of the country’s public finances.”
“[The stock market’s] optimism looks misplaced if you think the crisis has also created serious solvency problems.
“A $5tn central bank prop can keep credit flowing. But it cannot conjure up economic demand or turn bad loans into good credits. The risk stalking both markets and the Fed is that many companies are quietly becoming insolvent, as their debts overwhelm their collapsing revenues.”
https://www.ft.com/content/cc31fe38-8adb-11ea-9dcb-fe6871f4145a
“Donald Trump has thrown another punch at China’s handling of the coronavirus crisis, telling Reuters in an exclusive interview that Beijing’s response to the virus is proof that they’ll do “anything they can” to scupper his reelection bid after months of trade tensions.”
“Hundreds of protesters, some armed, gathered inside Michigan’s state capitol on Thursday as state lawmakers debated the Democratic governor’s request to extend her emergency powers to combat coronavirus.
“A tightly packed crowd of protesters, some carrying rifles, attempted to enter the floor of the legislative chamber…”
https://www.theguardian.com/us-news/2020/apr/30/michigan-protests-coronavirus-lockdown-armed-capitol
“Banks are dusting off their no-deal Brexit plans as concerns deepen that Britain and the European Union won’t agree a trade deal by December as the COVID-19 pandemic compounds fundamental disagreements over future relations.”
“Liverpool could be the second council to file for bankruptcy as the mayor and his chief finance officer prepare for an emergency budget meeting…
“They are the second council to warn of bankruptcy after Windsor and Maidenhead Council yesterday said they are considering issuing a section 114 because of the loss in tourism money this year.”
https://www.dailymail.co.uk/news/article-8273561/Liverpool-second-council-file-bankruptcy.html
“The first two weeks of the coronavirus lockdown triggered an unprecedented rise in food bank use as the economy was hit and household incomes plunged, data from hundreds of emergency food aid charities reveals.
“The Trussell Trust, the UK’s biggest food bank network, said it experienced its busiest ever period after lockdown was announced on 23 March.”
“Sweden has attracted global attention for not imposing a full lockdown, as seen in most of Europe, to contain the coronavirus pandemic.
“Nonetheless, data released from the country’s central bank and a leading Swedish think tank show that the economy will be just as badly hit as its European neighbors, if not worse.”
“A fringe protest group of extremists from the left and right of the political spectrum is plotting further rallies against Germany’s coronavirus restrictions on Friday (May 1) to coincide with traditional Labour Day demonstrations.
“In the capital Berlin, 5,000 police officers are set to be deployed to enforce rules which limit registered protests to 20 people…”
“Italy’s economy fell into a deep recession even before suffering the full effect of a drastic economic lockdown.”
“Migrant workers on Spanish farms that provide fruit and vegetables for UK supermarkets are trapped in dire conditions under lockdown, living in cardboard and plastic shelters without food or running water.
“Thousands of workers, many of them undocumented, live in settlements between huge greenhouses on farms in the southern Spanish provinces of Huelva and Almeria, key regions for European supply chains.”
“Europe is in the midst of a downturn not seen since the end of World War II, and the worst is yet to come, Europe’s top central banker said Thursday as she painted a scenario that will test how far the continent’s political leaders are willing to go to preserve their fractured union.”
https://www.nytimes.com/2020/04/30/business/europe-economy-coronavirus-recession.html
“Lebanon is in turmoil. The country’s long-running financial crisis, which led to the resignation of its prime minister in October, has only gotten worse because of the coronavirus pandemic.
“Before the pandemic, the World Bank projected that 45% of people in Lebanon would be below the poverty line in 2020. Now the government believes that up to 75% of people are in need of aid…”
https://edition.cnn.com/2020/04/30/middleeast/gallery/lebanon-protests/index.html
“The North Caucasus is beginning to show signs of destabilization, as pandemic-related restrictions and a poor economy expose societal fault lines.
“Regional governments imposed draconian self-isolation measures to stop the spread of the novel coronavirus but provided little or no relief to struggling businesses and individuals.”
https://jamestown.org/program/the-pandemic-crisis-erupts-into-riots-in-the-north-caucasus/
“South Korea’s exports slumped 24.3 percent in April from a year earlier under the impact of the COVID-19 pandemic, which also disrupted the global supply chains.
“This is the biggest plunge since the global financial crisis in 2009, data from the country’s trade ministry showed Friday.”
“China has received a wave of applications for debt relief from crisis-hit countries included in the “Belt and Road Initiative” as coronavirus strains the world’s biggest development programme. Chinese policy advisers and bankers told the Financial Times that Beijing was considering a number of responses…”
https://au.finance.yahoo.com/m/808985d7-c2d4-3ff7-9967-85b8005bfb6b/china-fields-calls-for-debt.html
“Defaults by weaker emerging market companies will rise in 2020 and 2021 as the effect of the COVID-19 pandemic hampers business activity, Moody’s forecast on Thursday…
“”The global spread of the coronavirus has led to business closures and restrictions on social interactions in many countries,” Moody’s said in a report.”
https://finance.yahoo.com/news/defaults-among-fragile-emerging-market-165311997.html
“The number of Australians receiving unemployment benefits soared to 1.3 million as of April 24, from 800,000 at end-2019, Department of Social Security figures released Thursday to a parliamentary panel showed.”
“Saudi Arabia’s Monetary Authority said on Tuesday that the kingdom’s net foreign assets, which include securities such as US Treasuries and foreign deposits, fell by $27 billion in March reaching $464 billion; the lowest levels recorded in 20 years…
“According to the ministry, oil revenues fell in the first three months of this year by 24 per cent year on year.”
https://www.middleeastmonitor.com/20200430-saudi-foreign-reserves-fall-to-lowest-record-in-20-years/
“It is pretty common in many articles being published now, to fairly glibly speak of shutting in existing wells. Indeed this is happening and it must happen. The point of this article was to let you know there is a potential dark side to doing this that won’t be known until they try and restart the wells.
“Some of these [oil] wells will never return to their former glory.”
https://oilprice.com/Energy/Crude-Oil/The-Oil-Wells-That-Will-Never-Recover.html
“…the leaders of the global medical community do not dare guarantee that this virus will not make a comeback at some point in the future. This alone means the entire world is in a deep crisis.
“All these factors have exposed the fragility of the world economy, and it is difficult for any country to survive alone. Many people recall the Wall Street meltdown in 1987, the Asian financial crisis of 1997, and the subprime crisis in 2008.
“These moments of crisis cannot be compared with the global depression that is about to occur. This is the biggest one ever, and now is the time for us to pray.”
https://www.bangkokpost.com/business/1911076/the-coming-great-depression
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