17th September 2021 Today’s Round-Up of Economic News

Stagflation Fears Cast Longer Shadow on Markets as Energy Surges

““The next big issue confronting markets could well be energy prices,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte… “I am actually getting quite concerned as we head into winter that nobody is really hedged against this move as we could see a very sharp spike in energy prices into the last quarter. That may feed through into ever more inflation.””


Demand for uranium has seen a surge overnight with prices sitting at a nine-year high.

“Shortages in supply for uranium saw its price rise from US$30 a pound just a month ago to US$48 a pound on Thursday with the share prices of Australian companies up by 70 per cent over the last couple of weeks.”


Britain faces a winter of economic carnage unless the Government gets its act together now

“Prices are rising. Wages are soaring out of control. Covid still threatens to close down the economy in the blink of an eye, and, on top of all that, there could easily be power shortages, closing schools and factories, over the winter.”


High gas prices force closure of two UK fertiliser plants.

“Soaring gas prices have forced the closure of two fertiliser plants in the north of England in one of the first signs that a global supply crunch could force many energy-intensive industries to scale back activity this winter.”


U.K. Energy Crisis Deepens as Fire Knocks Out Key Cable… a fire shut down a major cable bringing power from France, adding to the risk of economic disruption as Britain heads into winter.

“Gas and power prices jumped as the U.K. grid operator said the cable will be out for at least a month.. The timing couldn’t be worse…”


Europe’s Energy Crisis Is Becoming A Perfect Economic Storm… Electricity and natural gas prices are reaching record highs… there are prospects for a socio-economic crisis

“A massive economic and presumably political crisis in Europe has the potential to destabilize the global economy.”


Energy Crisis Worsens as Rally Hits Europe’s Industry Giants

“The continent is running out of time to refill its depleted storage sites before the start of the heating season in about a month, with inventories at their lowest level in more than a decade for this time of the year.”


Europe’s car sales go from uninspiring to ugly amid chip crunch…

“”While the pandemic is not over in the region, the single biggest challenge facing the industry is now the auto chip shortage,” LMC Automotive analysts wrote in a report last week.”


Merkel Leaves the German Economy With Trouble Under the Hood.

“Chancellor Angela Merkel steered Europe through crises, and Germany has boomed during her tenure. But she has ducked changes needed to ensure the success lasts, analysts say.”


China’s Nightmare Evergrande Scenario Is an Uncontrolled Crash…

“Protests intensify at China Evergrande Group offices across the country as the developer falls further behind on promises to more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-fourths of Manhattan grinds to a halt, leaving more than a million homebuyers in limbo.”


PBOC Injects $14 Billion as Evergrande Debt Woes Roil Market.

“China boosted its injection of short-term cash into the financial system in a sign the authorities are seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s debt crisis…

“The operation comes as the crisis facing Evergrande fuels concern over the health of the nation’s real estate and credit markets.”


China reveals largest ever drop in monthly steel output as struggling property developers roil markets

“Beijing revealed this week that Chinese steel output dropped by more than 12% in August to 83.2m tonnes, the greatest year-on-year slump since the global financial crisis, according to data from brokers Braemar ACM.”


South Korea Presidential Hopeful Warns of Housing Market Crash.

“South Korea’s leading opposition candidate warned of a potential collapse in the housing market and a spike in bankruptcies as interest rates rise, blaming President Moon Jae-in for letting debt levels hit a record through expansionary spending.”


Thailand desperate for tourists following COVID slump.

“Bangkok’s tourism industry is reeling under the aftermath of the pandemic and officials want to open more destinations to tourists, despite rising COVID cases.”


Myanmar Is a Failing State—and Could Be a Danger to Its Neighbors…

“Many banks have little cash and many multinational companies have left Myanmar as trade relations have soured between leading democracies and the country. Myanmar lost 1.2 million jobs in the second quarter of 2021.”


State of emergency declared in Sri Lanka amid economic slump and food shortages

“Sri Lanka has declared a state emergency and deployed its military onto the streets to stop citizens hoarding food, as the ongoing Covid-19 pandemic has exacerbated an existing economic crisis and caused a nationwide shortage of essential goods.”


The Pakistani currency hit an all-time low of Rs 168.94 against the US dollar in the inter bank market on Tuesday in the wake of burgeoning import payments and trade deficit…

Depreciation of rupee is not good news for the consumers already hit hard by the price hike of essential commodities.”


Afghanistan’s banks are running out of dollars, and may have to close their doors to customers unless the Taliban government releases funds soon, three people with direct knowledge of the matter said.

“The cash squeeze threatens to upend the country’s already battered economy…”


[Turkey’s] Erdogan Vows to Tackle Inflation as Food and Rent Prices Soar…

“Inflation rose for a third month to an annual 19.25% in August, but many Turks say that price increases for food and rent have outpaced that. This comes as the government faces eroding support for Erdogan who is seeking re-election in less than two years.”


Worrying mortgage data highlights the financial state of consumers in South Africa…

“Despite a recovery in the number of credit applications in the first quarter of 2021, an alarming 62.5% of these applications are rejected, indicating that many South Africans are still under considerable financial pressure.”


Bushmeat poaching is on the rise in Kenya as Covid hunger drives hunt for antelopes and giraffes…

“”The problem is not looking very good at the moment,” explains KWS Director General John Migui Waweru. He says a lot of otherwise decent-paying job opportunities were lost during the pandemic… “People are desperate,” he says.”


As rich-poor divide widens between nations, UN urges reform…

“A new report from the United Nations on Wednesday highlights divergent economic recoveries between nations and throws fresh urgency behind warnings that richer nations are not doing enough to help poorer countries from falling further behind…”


The pandemic has widened the chasm between markets and economy.

“A few months into the pandemic, the International Monetary Fund (IMF) had warned that the recovery that follows would be K-shaped. It’s becoming clear global equity markets and economic growth are the two divergent forks in this ‘K’.”


Global debt is soaring — and we need to talk about it…

“…since the world suffered the Great Financial Crisis, which prompted hand-wringing about the dangers of excessive leverage, global borrowing has grown by more than a third.”


You can read the previous ‘Climate’ thread here. I’ll be back tomorrow with an ‘Economic’ thread.

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15th September 2021 Today’s Round-Up of Economic News

Climate change is posing a bigger risk to bank balance sheets than the subprime mortgage crisis that contributed to the Great Recession, according to the co-author of a new study on the vulnerability of commercial loans.

“The study, conducted by the sustainability nonprofit Ceres and released last week, found that up to 10 percent of the value of U.S. commercial loans at leading banks is at risk of being wiped out by the effects of floods, fires, extreme heat and hurricanes.”


Climate financial risk is real and, like in 2008, the deniers are wrong.

“Unlike the 2008 global financial crisis – when banks were bailed out and global financial regulation overhauled – unmitigated climate change will lead to a crisis with irreversible outcomes.”


US Census data shows COVID pandemic unwound progress on poverty.

“U.S. household income fell in 2020 while the national poverty rate rose from a 60-year low as the Covid-19 pandemic upended the U.S. economy and threw millions out of work.”


From zippers to glass, shortages of basic goods hobble U.S. economy… Shortages of metals, plastics, wood and even liquor bottles are now the norm.

The upshot is a world where buyers must wait for delivery of items that were once plentiful, if they can get them at all.”


New records are being set daily at the Los Angeles-Long Beach Port Complex as ships filled to the brim with cargo continue to pour into U.S. ports [and are unable to dock] amid the unprecedented pandemic-driven import boom.

“The Marine Exchange of Southern California said 142 total ships were in port on Tuesday, setting a new all-time record for a third time since Friday.”


Half a million [UK] homes to be given new energy supplier after two more go bust.

“About half a million households will be moved to a new energy supplier after Utility Point and People’s Energy became the latest energy companies to go bust amid record energy market prices.”


Britain’s reservoir revolution: Water firms launch £500million plan to build up huge supplies to prevent taps from running dry as climate change advances.

“The moves comes against the background of climate change, which is predicted to create hotter, drier summers with associated droughts and wetter winters.”


China economy slowed in August, raising fears for global recovery.

“China’s slowing growth underlines how the spread of the delta variant of the coronavirus is challenging the world’s economic recovery from the pandemic. The slowdown in construction — which pushed China’s steel output to a 17-month low in August — is rippling across the global economy…”


Chaotic scenes erupted at the headquarters of cash-strapped developer China Evergrande Group on Monday, as roughly 100 disgruntled investors crowded its lobby to demand repayment of loans and financial products

”Evergrande, give us our money back!” they chanted.”


Explainer: How China Evergrande’s debt troubles pose a systemic risk… Total liability, which include payables [is] 1.97 trillion yuan, accounting for around 2% of the country’s GDP…

Late payments could trigger cross-defaults as many financial institutions have exposure to Evergrande… A collapse of Evergrande will have a large impact on the job market. It has 200,000 staff and hires 3.8 million people every year for project developments.”


China Evergrande’s liquidity crisis deepens on report of interest payment miss.

“China’s major banks have been notified by the housing authority that Evergrande Group won’t be able to pay loan interest due Sept. 20, Bloomberg reported on Wednesday…”


Chinese manufacturers are pumping out record volumes of freight containers after shippers ordered vast stacks of the steel boxes in an attempt to smooth out disruptions in the global supply chain.

Despite the extra wave of orders, however, shipping executives are warning it will do little to ease the global ocean freight and supply problems…”


Chip shortage drags on as plant closures hit carmakers… With a cascade of factory closures across Europe, North America and Asia, the shortages are likely to continue well into next year…

Estimates of the likely hit to car production because of the shortages have shot up in recent days.”


UN warns 1 million Afghan children at risk of starvation before winter hits.

United Nations Secretary-General António Guterres gave the warning while speaking in Geneva at a U.N. conference on the matter of Afghanistan’s dwindling resources and the livelihood of its people.”


Looming’ food crisis as jihadists ravage Niger’s Tillaberi…

The vast arid region, along with central Mali, has become the worst-hit area in the jihadists’ nine-year-old campaign in the Sahel. Thousands of people have died and tens of thousands have fled their homes.”


Warning over hunger crisis gets louder in East African countries.

Kenya, Uganda, South Sudan, Ethiopia, Rwanda, and Somalia are all currently facing different levels of food deficiencies due to drought, insufficient rainfall, conflict, locust invasion, and the aftershocks of Covid-19…”


US warns of funding shortfall as Yemen famine crisis deepens.

Senior officials from US President Joe Biden’s administration on Tuesday warned of stark funding shortfalls for aid work in Yemen, where fighting in the Marib region and elsewhere has pushed millions towards poverty and famine.”


Plague hits Madagascar as Oxford team races to finish the revolutionary vaccine.

A plague outbreak has killed at least seven people in Madagascar, as the island nation struggles to fend off a devastating famine and UK scientists race to develop a new vaccine for the ancient killer.”


Global Debt Hits Record $296 Trillion as World Lockdowns Ease…

“Global debt loads surged during the second quarter as households seized on low mortgage rates and governments continued borrowing heavily to revive pandemic-battered economies.”


Investors turn bearish on global economy though positioning upbeat – Bank of America survey.

Barely a tenth of respondents in a monthly fund manager survey expect a stronger global economy in the coming months, marking the lowest proportion since last April’s initial COVID-19 panic…”


The world is facing a dangerous bout of ‘stagflation’ as the economic recovery slows and prices rise, experts have warned.

In a gloomy report entitled Now For The Hard Part, Capital Economics said data from the US to China suggests that the rapid rebound from the pandemic is beginning to tail off.”


Shutdown and Aftershocks — Covid and the new world order…

“A global threat such as Covid-19, one that does not discriminate between nations, ideologies or races, might have been expected to encourage or force even rival great powers to work together. Instead, it has done the opposite, becoming itself a tool of systemic rivalry.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon.

13th September 2021 Today’s Round-Up of Economic News

Here’s an Inconvenient Truth: The [US] Growth Slowdown Goes Beyond the Delta Variant.

“Everyone knew that economic growth was going to slow from the second quarter. But it wasn’t supposed to happen so soon—or so sharply. The Covid-19 Delta variant is the obvious and convenient explanation, but it’s an incomplete one.”


The [US] economic recovery has a dirty secret… Joblessness is much higher than economic data would suggest.

“The data isn’t cooked or intentionally skewed. Instead, it boils down to the fact that the U.S. Bureau of Labor Statistics’ economic data isn’t well-suited to measure a labor market during a pandemic.”


Inflation watch: US producer prices surge to another record.

“Friday brought more confirmation of rising inflation after the United States Department of Labor said that its Producer Price Index (PPI) – which measures prices that businesses fetch for the goods and services they sell – jumped 8.3 percent in August yoy…”


[UK] Supermarkets could face ‘permanent shortages’, expert warns.

“The days of UK consumers being able to expect to pick up nearly whatever product they want, whenever they want from supermarket shelves are over, an industry expert has warned.”


Europe’s Power Crunch Deepens as Ireland Warns of Blackout Risk: U.K. Electricity prices surged to 2,300 pounds ($3,180) a megawatt-hour as Ireland warned of a power shortfall that could lead to blackouts and the cost of power broke records in Spain, Germany and France.

“Europe is facing an energy crunch as supplies of natural gas remain below what’s needed to satisfy demand.


Norway grapples with temptation of a ‘mini Brexit’… Norway is not a member of the EU but it is closely linked to the bloc through the European Economic Area (EEA) agreement.

“The deal gives Norway access to the common market in exchange for the adoption of most European directives. Both the Centre Party and the Socialist Left… have called for the marriage of convenience to be dissolved.”


EU Austerity Battle Ramps Up as France Announces New Spending…

“Europe is far from united. On the same day France said its budget would focus on driving economic growth rather than tax hikes, eight EU nations led by Austria wrote a letter in support of cutting debt levels.”


COVID: Thousands protest nightlife ban in the Netherlands.

“Organizers claim as many as 150,000 people showed up to the “Unmute Us” protests, calling for the lifting of coronavirus restrictions that forced music venues to shut down.”


Anti COVID vaccine protesters clash with police in Greece.

“Greek police fired tear gas and water canon on Saturday to break up a demonstration of thousands of people protesting against mandatory coronavirus vaccinations.”


Evergrande investors face 75% hit as company edges closer to restructure.

“The troubled Chinese property group Evergrande has edged closer to a government-engineered restructuring which could see bondholders take huge losses as Beijing’s price for saving millions of homeowners from financial ruin.”


China’s zero-Covid stance could worsen debt problems for companies.

“China’s zero-Covid approach could worsen the debt situation of the country’s companies, some of which are already in financial distress, says ratings giant S&P Global Ratings.”


Cracks in China’s Growth Put Risk-Market Rally on Shaky Ground.

“Fissures in the Chinese recovery are replacing taper-tantrum jitters as the lurking threat to the emerging-market rally. Developing-nation currencies are increasingly vulnerable to signs of weakness in China…”


With Economies on the Brink, Southeast Asia Chooses to Reopen.

“Even as they struggle with one of the world’s worst Covid-19 outbreaks, nations across Southeast Asia are slowly realizing that they can no longer afford the economy-crippling restrictions needed to squash it.”


The spectre of high inflation returns to haunt Latin America…

“Inflation causes particular alarm in Latin America because of the region’s long history of price instability…

“…particularly in the 1970s and 1980s.”


Argentina’s Crazy Primaries Are Looking Dangerous For President Fernández’s Peronists.

“A sustained economic crisis marked by consistent stagflation turbocharged with a global pandemic has pushed millions into poverty, as massive slums continue to grow accelerating problems like crime, drug-trafficking and addiction, and a chronic lack of education and jobs…”


Poverty in Colombia…

“According to a study by the Red de Ciudades Como Vamos, the economic crisis that followed the coronavirus pandemic had a devastating impact on poverty in all Colombia’s provincial capitals.”


Tunisia president indicates plans to amend constitution.

“Tunisia’s President Kais Saied has indicated plans to change the country’s constitution, seven weeks after he seized power in moves his opponents called a coup.”


Sri Lanka central bank chief steps down as reserve crisis deepens.

“Sri Lanka’s central bank chief to step down amid dwindling foreign exchange reserves, looming debt repayments…

“…and the economic fallout of an extended COVID-19 lockdown.”


Explainer: How bad is the crisis in Lebanon?

“Lebanon’s financial meltdown has swiftly worsened in the last month, with much of the country crippled by fuel shortages that have ignited country-wide security incidents.”


Food price inflation heaps pressure on poorer countries – Central banks face difficult monetary policy trade-off between taming increases and risking recovery

Prices have risen 40 per cent over the past 15 months, according to the latest data from the UN’s Food and Agriculture Organization, the biggest gain since surging food prices spurred the unrest of the Arab Spring in 2010-11.”


Supply chain issues add to stagflationary winds.

“Rather than a one-off dynamic, the global economy is experiencing waves of supply disruptions suggesting that longer-term forces are also in play… all this translates into stagflationary winds for the global economy that are unfamiliar to those that did not live through the 1970s.”


Supply chain crisis will leave permanent scar, UPS warns.

“The supply chain crisis unleashed by the pandemic will inflict lasting damage on the globalisation driven by multinationals, according to a top executive at UPS, one of the world’s largest delivery companies.”


The World’s Shippers Are Earning the Most Money Since 2008…

“This boom’s causes are twofold — an economic reopening after Covid that has spurred surging demand for goods and raw materials. Alongside that, the virus continues to cause disruption in global supply chains, choking up ports and delaying vessels, all of which is limiting how many are available to haul goods across oceans.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon.

10th September 2021 Today’s Round-Up of Economic News

Fed Officials’ Trading Draws Outcry, and Fuels Calls for Accountability. Central bank regional presidents traded securities in markets in which Fed choices mattered in 2020. Here’s why critics find that troubling…

“The Fed has gone from serving as a lender of last resort mostly to banks to, at extreme moments in both 2008 and 2020, using its tools to rescue large swaths of the financial system. That includes propping up the market for short-term corporate debt during the Great Recession and backstopping long-term company debt and enabling loans to Main Street businesses during the 2020 pandemic crisis.

“That role has helped to make the Fed and its officials privy to information affecting every corner of finance. Yet central bankers can still actively buy and sell most stocks and some types of bonds…”


The Federal Reserve should press ahead with a plan to dial down its massive pandemic stimulus programme despite an abrupt slowdown in US jobs growth last month, according to a top central bank official.

James Bullard, president of the St Louis Fed, dismissed concerns the labour market recovery was faltering, even after just 235,000 jobs were created in the month of August…”


Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.

In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.”


Our food supply is under threat from climate extremes: Congress must act to save it.

“…Further contraction in the [agricultural] industry and losses in productivity will ultimately threaten our access to safe, affordable food and worsen global hunger, which is already on a menacing rise.”


Disastrous season means UK shoppers could pay 50% more for pasta.

“A scramble for durum wheat has pushed the price up nearly 90% this summer after drought and soaring temperatures hit farms in Canada, one of the biggest producers. There are also supply issues in Italy…”


UK GDP growth slows to a trickle as ‘pingdemic’ and materials shortages bite…

“The Office for National Statistics (ONS) said that gross domestic product (GDP) rose by 0.1% in July, a slowdown from 1% growth in June. Companies had faced problems with the so-called “pingdemic” and shortages of materials – especially in the construction sector.”


Bank of England faces up to threat of ‘stagflation’ as cost of living crisis looms… Tighten policy and you risk further damaging growth without having much impact on the sort of “cost push” inflation we see today; leave things easy, and you further stoke the inflationary flames…

I wouldn’t be at all surprised to see it turn into a genuine political “crisis” later this year.


ECB Slows Crisis Stimulus in Shift Lagarde Says Isn’t Taper.

“The European Central Bank will slow the pace of its pandemic bond-buying program in the final quarter of 2021, a shift President Christine Lagarde insists isn’t a move heralding a wind-down in stimulus for the euro-region’s still-vulnerable recovery.”


Italian police raid Covid health pass protesters ‘planning violence’.

“Italian police raided the homes and searched the computers on Thursday of eight people suspected of planning violence during protests against the country’s coronavirus passport.”


China’s factory and consumer prices continue to diverge, ramping up concern of an economic slowdown…

“Analysts say the widening ‘scissors gap’ between factory and consumer prices points to worsening profit margins for Chinese companies.”


China Factory Inflation Surge to Add Pressure to Global Prices…

China’s factory-gate inflation accelerated to a 13-year high, adding to the pressure on global consumer prices which have been pushed up by a commodities boom, soaring shipping costs and an uneven economic recovery from the pandemic.”


Inflation splits emerging countries into doves and hawks… More than in the developed world, rising prices already pose a real threat to stability

It is a question for policymakers everywhere: which is worse, stagnation or instability. But in emerging markets the stakes are arguably higher if inflation gets out of control.”


Brazil’s central bank will need to “act fast” to prevent a further deterioration of the country’s inflation expectations, its President Roberto Campos Neto said.

““We are seeing many different inflationary shocks building on top of each other. It’s very important to act fast to prevent inflation expectations from de-anchoring,” Campos Neto said…”


Bolsonaro Calls on Truckers to Lift Protests Blocking Roads.

“Brazilian President Jair Bolsonaro asked truckers to lift any blockades on highways as concerns over the possibility of a broader strike add to an already charged political climate and worries about galloping inflation.”


COVID-19 pushes Kenya’s economy into first contraction in nearly 30 years.

“Kenya’s economic output contracted for the first time in nearly three decades last year, pummeled by the impact of the coronavirus crisis that hit key sectors like tourism, official data showed on Thursday.”


Cholera kills 2,000 in Nigeria in worst outbreak for more than a decade.

“…this year a health system already stretched by Covid-19 and staff shortages has struggled to counter the cholera outbreak, while insecurity in Nigeria’s northwestern states is making it more difficult to respond to the crisis.”


Africa: Record Numbers Nabbed At Sea to Europe.

“More than 23,000 people have been intercepted at sea and returned to Libya after failed attempts to reach Europe. This is almost double the total for the whole of 2020 and the highest number on record since interceptions by the Libyan Coast Guard began in 2017.”


North Korean Restaurants Abandon Price Controls Amid Food Shortages.

“With food prices on the rise in North Korea, a Pyongyang restaurant serving the city’s signature dish has had to abandon price controls, causing a more than twentyfold increase and making a casual meal outside the house an expensive luxury that ordinary residents of the capital can no longer afford…”


Toyota cuts production target on parts and chips shortages.

“Toyota Motor Corp (7203.T) cut its annual production target on Friday by 300,000 vehicles as a slowdown in output at COVID-19 hit parts factories in Vietnam and Malaysia added to the pain of a global shortage of auto chips.”


Container Shipping Giant Freezes Spot Rates Amid Trade Chaos…

The cost of shipping a 40-foot container from Shanghai to Los Angeles reached $11,569 in the past week, nearly eight times higher than pre-pandemic levels, according to the Drewry World Container Index.”


 Global gas prices soar as industry struggles to meet resurgent demand.

“Global gas prices have climbed to their highest level for seven years in real terms, as traders anticipate a shortage this winter, with consumption rebounding more quickly than production from the pandemic slump last year.”


You can read the previous ‘Economic’ thread here. I’ll be back over the weekend with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon.

8th September 2021 Today’s Round-Up of Economic News

The world economy risks turning stagflationary. While policy makers once hoped we’d now be seeing decent growth and slowing inflation, obstacles to that outlook are emerging by the day.

“The mounting concern now is of a toxic mixture of weak demand and accelerating prices. Risk one is the delta variant, which, as Enda Curran details, is undermining efforts to rev up factories, offices and schools.

“Worrying recent data include the smallest hiring of Americans in seven months, deterioration in Germany’s Ifo index, a crumbling of China’s services sector and a weakening of global manufacturing.”


Bull run on Wall Street leaves bankers warning over risks of stock market sell-off.

“Analysts are concerned by rising inflation, a fall in consumer sentiment and flattening growth in profits.”


A train wreck’: Congress faces a daunting September as deadlines pile up.

“Democrats are grappling with how to avert a government shutdown while advancing infrastructure and budget bills at the heart of President Joe Biden’s agenda.”


We [UK] are sleepwalking into a winter energy crisis… a disastrous energy shock cannot be ruled out.

“Britain is in the grip of a natural gas crunch that has triggered a sharp spike in prices, leaving millions of households grappling with soaring bills, and forcing energy-intensive businesses to consider curbing activity… a [potential] economic catastrophe that could derail the fragile recovery.


Scottish vegetable growers are having to throw away millions of cauliflower and broccoli heads due a shortage of farm workers and lorry drivers.

“Producers predict that problems with lack of labour will only get worse in the run up to Christmas.”


Sewage discharge rules eased over fears of chemical shortage

The government has told wastewater plants in England and Wales they may be able to discharge effluent that had not been fully treated because of disruption caused by “supply chain failure”.”


Highest taxes since Second World War as Boris Johnson abandons manifesto pledges.

“Prime Minister raises National Insurance and pulls plug on the pensions triple lock to fund NHS and social care.”


Merkel Despairs as German Conservatives Slump on Her Watch.

“For weeks Angela Merkel has been observing from afar the leader of her once-mighty party, the Christian Democrats, fall apart. The German chancellor finally decided to step in to try and salvage a floundering campaign, but it may be too late.”


French wine suffers worst hit in decades amid damage from frost and disease.

“French wine makers are expected to produce nearly a third less wine this year than usual, after their vineyards were struck by frosts, poor weather and disease during the spring and summer.”


Euro junk bond yields below inflation for first time [ie real yields have turned negative]…

“Yields on euro area junk-rated bonds have fallen below the bloc’s inflation rate for the first time, a further sign of the scarcity of assets offering investors any real returns.”


Japan’s tepid July household spending adds to economic recovery doubts.

“Japan’s household spending grew less than expected in July as a resurgence in COVID-19 cases hindered consumer activity, throwing broader economic recovery prospects into doubt.”


China Property Crackdown Alarms Analysts as Economic Risks Grow.

“Economists at Nomura Holdings Inc. are calling the curbs China’s “Volcker Moment” that will hurt the economy. The credit squeeze in the property sector is “unnecessarily aggressive” and may weigh on industrial demand and consumption… A prominent Chinese economist cautioned of a potential crisis should home values drop below mortgages.”


Emerging Market Central Banks Respond to Inflation Shock.

“Central banks in emerging markets (EM) have been responding aggressively to accelerating inflation, Fitch Ratings says in a new report. The speed with which the broad direction of EM monetary policy has changed has been striking…”


Thai protests turn violent amid government’s faltering Covid-19 response.

“Thailand’s iron-fisted prime minister once seemed unstoppable, but is now on shaky ground amid public anger over vaccine shortages.”


Bolsonaro supporters clash with police before major rally in Brasília.

“Pre-dawn skirmishes have erupted between police and supporters of Brazil’s president, Jair Bolsonaro, as rightwing activists tried to force their way towards congress before major pro-government rallies that have put Latin America’s biggest democracy on edge.”


Venezuela central bank gold reserves fall as Maduro seeks cash.

“Venezuela’s gold reserves fell by 3 tonnes in the first half of 2021 to their lowest level in 50 years, central bank data showed on Tuesday, as President Nicolas Maduro’s cash-strapped government continues selling gold as a source of income.”


Bitcoin crashes on first day as El Salvador’s legal tender.

“Angry protests, technological glitches and a plummet in value marked the first day of El Salvador adopting Bitcoin as legal tender. The price of Bitcoin on Tuesday crashed to its lowest in nearly a month, falling from $52,000 (£37,730) to under $43,000 at one point.”


South Sudanese Reel from Fuel and Food Shortages.

“South Sudanese are reeling from fuel shortages and soaring food prices after Kenyan and Ugandan truck drivers went on strike nearly two weeks ago, stifling commerce along the Uganda/South Sudan border.”


Hungry Yemenis eyeing fish catch blame exports for prohibitive prices.

“Ahmed al-Yafei watched fishermen unloading boxes of catfish from small boats docked in the bustling port of Aden in south Yemen, keen to buy some for his hungry family – before realising he could not afford it.”


Price rise is driving Delhi’s food vendors to financial collapse – and their customers to hunger.

Shooting oil prices have made food more expensive. And daily wagers who struggle to find work have less money to spare.”


Our children are hungry’: economic crisis pushes Afghans to desperation.

“Afghans forced to sell possessions on streets of Mazar-e-Sharif as fragile economy buckles under instability… On the side of the road it looks as if entire homes have been emptied on to the asphalt, where teapots, cushions, books and teddy bears have been hastily laid out for sale.”


One of the world’s largest port and terminal operators has warned the global shipping and supply chain crisis that is leaving shelves empty on the high street can be resolved only by a slowdown in consumer demand

““We need to work out how we break this vicious circle,” said the boss of APM, the ports and terminal division of the world’s biggest shipping group…”


Major automakers fear the global chip shortage could persist for some time.

Car manufacturers including Ford, Volkswagen and Daimler are still struggling to deal with the impact of the global chip shortage, with executives from each of the companies warning a lack of silicon is likely to remain a problem.”


Covid-19 and the structural crises of our time… The pandemic landed on a wobbly financial stage. It hit the world economy hard just when it was still struggling to emerge from the catastrophic 2008 Global Financial Crisis (GFC)

“…repeating the same monetary policies that were used to fight the last financial crisis is sowing the seeds for the next financial crisis [not that we have much choice].” 


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

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6th September 2021 Today’s Round-Up of Economic News

Russia’s central bank says a new financial crisis on the scale of the 2008 collapse could happen in less than 18 months if global inflation is not kept in check.

“A surge in public and private sector debt levels during the recovery from the pandemic could cause the global economy to “deteriorate drastically and rapidly” if the US Federal Reserve has to jack up interest rates to quell inflation, the Bank of Russia warned in its annual monetary policy forecast…

“Several large emerging markets have raised interest rates aggressively this year in an attempt to keep rising inflation under control.”


Stagflation Has Arrived [in the US]… Recent data in the inflation and economic surprise indexes indicate that stagflation has arrived.

“With growth trending lower and inflation higher with an increased debt burden and rates near zero, I believe it is secular…

“My instinct is that without incessant stimulus, prices of all capital goods would collapse.”


Jobs slowdown makes Fed September taper statement unlikely…

“A sharp slowdown in US jobs growth precludes the possibility that the Federal Reserve will announce plans this month to begin scaling back its pandemic-era stimulus, economists say, as the spread of the Delta coronavirus variant muddies the economic outlook.”


Silent crisis’ looms as US to end Covid aid for millions of jobless…

“The government-funded programs that increased weekly payments and gave aid to the long-term unemployed and freelancers were credited with keeping the United States from an even worse economic collapse last year.”


The “perfect storm” of problems scuppering UK supply chains will increase prices sharply for households across the country, road haulage and food bosses have warned.

“A paucity of HGV drivers, soaring shipping costs, delays in deliveries from Asia and ongoing Covid related problems have compounded to produce severe shortages of products.”


UK energy bills may rise due to global gas supply crunch.

“The surging price of natural gas could send UK energy bills soaring and force energy-intensive industries to limit production or close down factories altogether.”


Former Italian Prime Minister Mario Monti told CNBC Saturday that he believes the greatest threat to Europe’s economic recovery from the coronavirus pandemic is “stagflation.”

“Monti, now the president of Italy’s Bocconi University, said the “huge mass” of accommodative monetary policy by central banks and fiscal stimulus from governments… “may well fire more inflation.””


ECB Tightening Too Soon Risks ‘Big Mistake,’ EU’s Gentiloni Says…

“With the virus pandemic far from over, policy makers in the euro area and the U.S. are weighing inflation risks against the need to sustain the economic recovery. The ECB is due to make its next policy decision on Thursday.”


Australia must diversify its economy to rely less on China, its largest trading partner, Treasurer Josh Frydenberg said on Monday, as he warned businesses to brace for new tensions with Beijing

“Australia’s A$2 trillion economy is at risk of entering its second recession in as many years as its largest states are in prolonged Covid-19 lockdowns.”


China’s Slowdown Is Just as Important as the U.S. Jobs Shocker…

“If you can tear yourself away from the disappointing U.S. jobs numbers and what that means for the Federal Reserve’s prospective reduction in stimulus, signals from China offer an equally sobering view of the global recovery.”


China’s souring developer loans raise fear of financial contagion…

“Nonperforming loans to the real estate sector, which has for years been the backbone of growth for the world’s second-largest economy, surged 30% across the five largest banks to 97 billion yuan ($15 billion) in the first six months of the year, according to filings. A similar story is playing out at smaller banks.”


Fear of stagflation increases significantly in Brazil.

“The Central Bank has been revising upward estimates for inflation this year for more than 20 consecutive weeks. While the consensus at the beginning of the year for IPCA was 3.32% in 2021, today, the consensus is 7.27%.”


Latin American countries are worried about inflation: Chile’s central bank became the latest in Latin America to hike interest rates this week, startling markets with a decision to double its overnight rate…

“Mexico, Brazil and Peru have all raised rates in the last few months. And Colombia’s central bankers have also hinted that they may need to begin a tightening policy.


Turkish inflation jumps above policy rate to 19.25%.

“Turkish annual inflation jumped more than expected to 19.25% in August, above the central bank’s policy rate and its highest level in more than two years, according to data released on Friday, maintaining pressure for tight monetary policy.”


ISIS militants kill at least 16 security personnel in northern Iraq…

The attacks raise questions about the ability of Iraqi forces to maintain security beyond the planned withdrawal of US troops from Iraq by the end of this year [Sounds familiar]. The US has 2,500 troops among the 3,500 members of the international anti-ISIS coalition in Iraq.”


Concerns grow in Libya as armed clashes break out in Tripoli…

“Conflict in Tripoli between the armed groups who vie to control both territory and state institutions would further undermine the prospect of December elections as part of a plan to end a decade of chaos, violence and division.”


Aluminum climbed to the highest in more than a decade as political unrest in Guinea fueled concerns over supply of the raw material needed to make the metal.

“A unit of the military seized power and suspended the constitution, with head of special forces, Colonel Mamady Doumbouya, urging the army to back him.”


Nigeria has fallen from grace; most terrorised nation, poverty capital of the world — Mailafia.

“Former Deputy Governor of Central Bank of Nigeria(CBN), Dr Obadaiah Mailafia has lamented that the country has fallen from grace by being the most terrorised nation and the poverty capital of the world after India and Afghanistan.”


The high cost of living and continued disruption from the Covid-19 pandemic are eroding the incomes of many Kenyans and pushing more households into poverty.

“This is according to the latest survey by research firm GeoPoll that paints a grim picture of the financial hardships majority of Kenyans are experiencing.”


Ethiopia’s Tigray conflict: Thousands reported killed in clashes.

“The rebel forces said on Sunday that they had killed 3,073 “enemy forces”, with 4,473 injured. It comes after the military said it had killed more than 5,600 rebels, without specifying a timeframe… It is hard to verify figures from either side due to a communications blackout in the region.”


Rats, drought and labour shortages eat into global edible oils recovery. The FAO’s global edible oils index is up 91% since last June, and is expected to climb further

“…producers have been battling a range of impediments, including labour shortages, heatwaves and vermin infestation….

“…driving collective stocks of the world’s most consumed edible oils – palm, soybean, canola (rapeseed) and sunflowerseed – to their lowest levels in a decade.”


2021 climate disasters foreshadow future challenges for public health.

“Around the world, extreme droughts and heat will push millions toward starvation. Forest fires and rising sea levels will displace entire populations, putting them at higher risk of trauma, infection and food insecurity. Disease-carrying insects will expand their reach. These are not hypothetical risks…”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via patreon.com.