12th June 2021 Today’s Round-Up of Economic News

Fresh Covid-19 Outbreaks in Asia Disrupt Global Shipping, Chip Supply Chain: An outbreak at one of the world’s busiest ports in southern China has led to global shipping delays, while infections at key points in the semiconductor supply chain in Taiwan and Malaysia are worsening a global chip shortage that has hindered production in the auto and technology industries.

The new headaches add to inflation concerns, after China and the U.S. this week recorded their biggest annual jumps in factory-gate prices and consumer prices, respectively, in more than a decade.”


The world must stand by Southeast Asia in its fight against COVID… Today, a surge in infections in Southeast Asia that is costing lives and threatening to derail recovery from last year’s painful recession also demands global attention.

“As the highly contagious Indian and U.K. variants of COVID take root, the developed world needs to do more than hold its breath and hope.”


Inflation burst begins to tear market in two.

A jump in US consumer prices has underscored the threat to financial markets as a growing chorus of doubters warns that inflation could skip away from central bankers’ control.”


The Longer The Fed Pins Down Rates, The Uglier The Inflation Damage Will Be… The inflation data this morning came in hot, as expected.

Still, the Treasury market moved in the opposite direction of what would be considered intuitive, in a world where the Fed looks to be almost certainly behind the curve on inflation (already).”


Harvest of horrors: It was always a gruelling job. But today our demand for £4 chickens and milk at 40p a pint is driving [the UK’s] small farmers to despair and ruin

Our remaining 180,000 farmers still provide over half the food we eat, and yet because we demand it so cheap, farming has to be intensive.”


Unemployment among recent graduates has risen to levels last seen during the austerity era, with [the UK’s] young people worst affected by job shortages due to the pandemic

“The figures showed an unemployment crisis facing young people who had not gone to university, with nearly one in four unemployed and not looking for work…”


A rapid and chaotic energy transition would leave Europe’s biggest banks in financial peril comparable to the subprime crisis that United States lenders faced in 2008.”

[Almost seems moot as a “rapid and chaotic energy transition” likely means systemic failure IMO.]


China’s boast of eradicating poverty challenged by new study

Report [published on Tuesday by Bill Bikales, former senior economist for the UN in China] says Beijing failed to take into account impact of Covid on vulnerable urban families.”


China credit slowdown ‘happening faster than expected’ even as bank loans rose unexpectedly in May…

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 11 per cent in May, the weakest pace since February 2020.”


Russia raises key interest rate to 5.5% as it struggles to control inflation.

Russia’s central bank has raised its key interest rate by 50 basis points as Moscow struggles to tame inflation, which is running at its highest level for almost five years.”


Cong protests across Rajasthan [India] against fuel price hike, inflation

Congress leaders and workers held symbolic protests outside petrol pumps and demanded the centre curb inflation.”


Oman’s youth unemployment problem is a harbinger for wider Gulf.

Unrest in Oman is a harbinger for other Gulf petrostates that need to diversify their economies to create jobs for legions of young people.”


Sudan: Protests in Khartoum over price-spiking petrol subsidy removal.

Tyres burned in blockades along the streets of Khartoum Thursday in protest of the Sudanese government’s decision — in line with reforms to make the country eligible for an IMF debt relief initiative, to remove subsidies on petrol and diesel resulting in their respective prices more than doubling.”


Concerns grow that Lebanon fuel crisis is leading to ‘industrial and agricultural disaster’

Gasoline stocks running out and factories closing next week… ” “the political class in Lebanon is in denial, and people are rapidly heading toward the crisis while the state does not have any response plan.””


Rise in Turkish food prices sparks fears of shortages.

“With its food inflation already above 17%, crisis-hit Turkey is bracing for further increases in food prices amid looming declines in key crops due to drought, coming atop already serious problems in the agricultural sector and the country’s unremitting currency woes.”


Algerians to elect parliament amid ‘repression’ of protest movement.

“Algerians vote in parliamentary elections on Saturday as authorities seek to bolster their legitimacy and snuff out a long-running protest movement, under what activists say is a “climate of repression”.”


Sierra Leone faces serious food crisis.

“A recent study by the World Food Programme (WFP) says that over 4.7 million people out of a population of just over 7 million in Sierra Leone are food insecure. This means that 66 percent of the population cannot meet their basic food needs.”


Covid-19 Plunges 50 % Zimbabweans Into Extreme Poverty

“Extreme poverty in Zimbabwe rose to 49 % in 2020 due to the disruption caused on the national economy by Covid-19, coupled with inadequacies in terms of social protection, the latest World Bank report has established.”


The cost of Colombia’s social unrest to oil and gas producers.

The financial cost of Colombia’s social unrest to hydrocarbon producers has exceeded US$120mn, as blockades and violence have crippled oilfield operations, according to energy minister Diego Mesa.”


Venezuela’s public sector surviving on ‘starvation salary’

Johany Perez, a stretcher-bearer at a hospital in Caracas, earns a “starvation wage” of the minimum $2.20 a month in a Venezuela wracked by a severe economic crisis.”


Steel’s massive rally is hitting all parts of the global economy.

“Demand is so frenzied that US mills have stopped taking orders from customers… In a global economy already shaken by supply shortages and inflation worries, the mills’ moves may signal more delivery snags and even higher prices for a commodity key to a wide swath of industries.”


Tin prices rose to their highest in more than a decade on Friday as expectations of severe shortages due to supply and shipping disruptions created by COVID-19 restrictions fuelled another speculative buying frenzy.


Corn stockpiles in the U.S., the world’s biggest shipper, keep on shrinking [and have a hit a 25-year low] at a time when agricultural markets are steeped in worries over strained supplies and food inflation.

The weather’s too dry for crops to thrive. Americans are embarking on summer travels, which burns up corn-based fuel that’s mixed into gasoline. China is scouring the world market for grains…”


From Beans to Burgers, Food Is Getting More Expensive… Chipotle, Shake Shack and Piggly Wiggly are all raising prices to cover higher costs

Food prices are rising because of the higher costs for labor and transport but also ingredients including corn, soybean oil and wheat.”


António Guterres on the climate crisis: ‘We are coming to a point of no return’

“Before meeting the leaders of the world’s major economic powers at the G7 summit in the UK, the UN Secretary General said he was concerned that the richest nations have pumped billions of dollars more into fossil fuels than clean energy since the pandemic, despite their promises of a green recovery.”


Edge of Pine Island Glacier’s ice shelf is ripping apart, causing key Antarctic glacier to gain speed… The ice shelf on Antarctica’s Pine Island Glacier lost about one-fifth of its area from 2017 to 2020, mostly in three dramatic breaks…

“The loss of Pine Island’s ice shelf now looks like it possibly could occur in the next decade or two, as opposed to the melt-driven subsurface change playing out over 100 or more years,” said co-author Pierre Dutrieux, an ocean physicist at British Antarctic Survey. “So it’s a potentially much more rapid and abrupt change.”” 


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

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

If 2020 was the year of the pandemic, 2021 is shaping up to be the year of stressed supply chains and the shortages economy.

In scale and scope, unprecedented supply shortages have had a cascading impact on global supply chains and prices of key inputs.”


The Biden administration has set up a new “Supply Chain Disruptions Task Force” as part of its response to ongoing shortages of semiconductors and other critical goods.

“The task force, led by the secretaries of commerce, transportation and agriculture, is aiming to tackle bottlenecks in the chip industry, as well as in the transportation sector, home building and construction, and agriculture and food, senior administration officials told reporters.”


The jobs are coming back [US] — but the workers are not. Roughly half of workers recently surveyed said they would turn down a job offer that mandated full-time in-office work.

“Restaurants, hotels and stores are scrambling to find workers to fill lower-paying positions as demand surges along with reopenings. Unlike at their white-collar counterparts, much of the work can’t be conducted remotely, which presents unique challenges.”


Stagflation is U.S. economists’ biggest fear, SIFMA says

“Amid the focus on inflation, SIFMA said that 87% of respondents “view stagflation, as opposed to hyperinflation or deflation, as the bigger risk to the economy.” Stagflation is when slow economic growth is accompanied by high inflation and high unemployment.”


‘Scared Of Civil Unrest’… Walk into any [Florida] gun store and owners are singing the same tune – firearm sales are up

““Yeah, I’ve seen a big uptick in AR-15s. Anybody who doesn’t have one wants to get one now. And the people who already have them just for target [shooting] are buying three or four more just to have them,” said Roy Gosley.”


Mortgage Surge Pushes Canada Consumer Debt to $1.7 Trillion.

“A surge in mortgage borrowing is pushing consumer debt loads higher in Canada despite falling credit card use, as households plow more money into their homes while spending less on everything else.”


UK housing market is on fire, warns Bank of England chief economist

“Andy Haldane warned that the property market was likely to continue running hot while all these factors, in combination with the central bank’s ultra-low interest rates, remained in place. He said the recent rise in house prices – which topped 10% over the 12 months to March 2021, according to official data – was very likely to worsen inequality.”


Fresh food is being left to rot undelivered as UK supermarket shelves and restaurant plates sit empty due to nationwide Heavy Goods Vehicle driver shortage, fruit and veg boss says…

“Mr O’Malley wrote: ‘…this is now a crisis of national importance.'”


Shortages are crippling Germany’s post-Covid recovery in the wake of a shock slump for manufacturers, experts have warned…

Ministers blamed the upset – which leaves industrial output lagging more than 5pc below its pre-Covid level – on “a shortage of producer goods, especially semiconductors and lumber”.”


Italy’s Tomato Harvest Threatened by Can Shortages

“Tomato sauce on your spaghetti may be harder to come by this year as a global shortage of steel sheets to make cans for food production risks leaving Italian tomatoes rotting in the fields.”


The price of goods leaving China’s factories, or ‘China’s factory gate prices’, has risen at the quickest rate in over 12 years, as a result of surging global commodity prices.

It is drawing attention to inflationary pressures while policymakers are trying to stimulate their economies in the aftermath of a coronavirus-induced downturn.”


Covid outbreak in China sparks fears of trade disruption.

A Covid-19 outbreak in southern China is curbing activity at some of the country’s biggest ports, stoking fears that further disruption to international trade risks pushing up the price of its exports.”


Huarong, Evergrande Bond Slump Tests Too-Big-to-Fail Belief.

“A bond selloff in two of China’s most prolific debt issuers is widening concern over contagion risks in the country’s $862 billion dollar bond market.”


China investigates senior bad debt official for corruption… Probe of Great Wall executive comes as global investor concerns grow over defaults…

“The probe is the latest indication of possible financial misconduct in the top ranks of China’s “bad debt” asset management companies, as concerns rise over their high debt levels and falling profits.”


China gets tough on financial sector risk management, extends contingency planning to more institutions

““Recovery and contingency planning is conducive to shoring up financial institutions’ risk awareness and crisis management capacity,” the China Banking and Insurance Regulatory Commission (CBIRC) said on Wednesday.”


Iran mired in economic pain as presidential vote nears.

“When Iranians vote for a new president next week, they will do so in the depths of an economic crisis brought on by crippling sanctions and worsened by the pandemic.”


Iraq Aims to Go Nuclear to Resolve Crippling Power Shortages.

“Iraq is working on a plan to build nuclear reactors as the electricity-starved petrostate seeks to end the widespread blackouts that have sparked social unrest.”


‘This is a revolution’: the faces of Colombia’s protests.

“Fifty-eight people have died in six weeks of unrest – at least 45 of them killed by police – and dozens of people have gone missing… But demonstrators say they are more determined than ever to fight for change.”


UN special rapporteur to Myanmar warns of ‘mass deaths’ from starvation, disease

“Myanmar has been in chaos and its economy paralysed since the February putsch and a brutal military crackdown on dissent that has killed over 800, according to a local monitoring group.”


World Bank Sees Strongest Rebound in 80 Years Despite Divergence

“It’s the tale of two recoveries,” Ayhan Kose, director of the World Bank group, said in an interview. “On the one hand, advanced economies, big countries, are delivering fast growth, record growth [but accruing totally unsustainable quantities of debt in so doing]. On the other hand, you have these low-income countries struggling to generate growth.””


Child labour worldwide increases for first time in 20 years

“Child labour has risen for the first time in two decades and the coronavirus crisis threatens to push millions more youngsters towards the same fate, Unicef has said. The pandemic risks worsening the situation, the agencies say.”


Sovereign Defaults Hit Record in 2020; More Are Possible.

“Fitch Ratings-London-08 June 2021: The sovereign issuer-based default rate rose to a record high in 2020 against a backdrop of weakened sovereign credit profiles due to the Covid-19 pandemic, Fitch Ratings says. Downgrade pressures have eased this year, but our ratings indicate that more defaults are possible.”


Haunted by memories of past U.S. interest rate hikes, the world’s central banks are laying the groundwork for a transition to life with less global stimulus, with many countries already signalling moves to the exit

“…more vulnerable central banks are fortifying their financial systems to ward off the type of capital flight that hit emerging markets during the 2013 “taper tantrum,” which was triggered by mere hints of Fed tightening…”


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.

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

Covid far worse for work than 2008 financial crash: UN.

The United Nations said Monday that the Covid-19 pandemic’s impact on the world of work was four times worse than the 2008 economic crisis. The UN’s International Labour Organization said the pandemic had had a “devastating” and even “cataclysmic” effect, as it sought to tackle an uneven recovery from the coronavirus crisis.”


The Fed Is Risking a Full-Blown Recession [with its new monetary framework]… monetary policy will remain loose until overheating begins – and cooling things off will require the Fed to increase interest rates much faster and further than it would if it started raising rates sooner…

“The result will be more volatility in short-term rates, and a greater danger of an economic hard landing.”


Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation.

“Inflation may look like a problem that will go away, but is more likely to persist and lead to a crisis in the years ahead, according to a warning from Deutsche Bank economists.”


The US Chamber of Commerce is warning of a crisis affecting businesses “across every industry, in every state”. Angst is spreading about a lack of workers in Germany’s hospitality sector, and there are comparable issues in other countries such as Norway, Australia and Singapore.

Meanwhile, despite unemployment at 1.6 million, the UK is experiencing its own labour problems, partly caused by the fact that 1.3 million foreign nationals have left the country in the last year.”


I can’t recruit chefs’: Brexit and Covid plunge hospitality into crisis.

Sunny days should see the UK’s restaurants and pubs welcoming customers, but they face a staffing nightmare.”


Wild Housing Market Made His Modest Home a Hot Property… Chuck Vukotich, owner of a home on a cul-de-sac in Penn Hills, Pa., says he regularly receives calls from property speculators

Fevered buying has stretched beyond the vacation homes and upscale suburbs that white-collar workers sought out during the pandemic year. Even small towns and distant suburbs where homes routinely sell for less than $100,000 are abuzz.”


Red Hot Housing Market Is Creating a Fresh Risk for U.K. Economy… The U.K. property market is heating up rapidly, and a mix of surging demand and double-digit price growth is causing concern that an unsustainable bubble is building…

“…with affordability stretched and lenders easing mortgage requirements, the signs are starting to worry some Bank of England policy makers.”


At the end of last year, UK house prices were more than eight times average earnings. That is the highest it has been for 120 years… This house price boom is not simply a British phenomenon. It is a global one…

According to Knight Frank, in the year to the end of March, [prices] were up 22.1 per cent in New Zealand, 16.6 per cent in Luxembourg, 13.2 per cent in the US, 13 per cent in Sweden, 10.8 per cent in Canada…”


UK Economy faces ‘long Covid’ if debts not tackled… Hospitality, retail and leisure firms are facing huge levels of debt as the economy reopens, industry bodies have told the government.

“Kate Nicholls, the boss of Hospitality UK, warned of “long Covid for the economy, if you’re not very careful”.”


The ECB Has Far Worse Troubles Than Inflation

“The real reason that hawkish noises have subsided is the strength of the euro, which is close to its highest point against the dollar in three years. For an export-led economy this will act as a brake on activity and could threaten to derail any recovery.”


Hong Kong’s Poor Families Doubled Amid Pandemic, Protests.

“The number of low-income households in Hong Kong has almost doubled over the past two years, underscoring the damage wrought by a historic recession amid protests and the pandemic.”


How second wave of COVID-19 has decimated India’s rural economy.

“The government has said that the economic impact from the second Covid-19 wave will be less than that of the first. But economists point to signs of a growing rural economic crisis, and call for urgent relief measures to ward off long-term damage.”


Colombia Inflation Jumps Most Since 1998 as Unrest Hits Supplies.

Colombian inflation jumped the most in more than two decades as civil unrest snarled supply chains already strained by coronavirus lockdown restrictions.”


Nicaragua president Daniel Ortega orders detention of rivals ahead of November’s presidential elections

Police said they arrested Arturo Cruz Sequeira, a former ambassador to the United States, under a controversial ‘treason’ law passed in December.”


Peruvians face a polarising choice between right-wing populist Keiko Fujimori and radical leftist Pedro Castillo when they elect a new president in a country desperate for an end to years of political turbulence.

The new leader will need to tackle a country in crisis, suffering from recession and with the worst coronavirus fatality rate in the world…”


South Darfur: 36 killed, dozens wounded in tribal clashes… At least 36 people have been killed and dozens wounded after clashes between Arab and non-Arab tribes in South Darfur over the weekend.

“The fighting broke out on Saturday between the Arab Taisha and ethnic African Fallata tribes…”


Millions On the Brink in Ethiopia’s War-Torn Tigray, U.K. Document Says.

Almost all civilians living in Ethiopia’s Tigray region are in need of life-saving aid and a famine may have already begun in the war-torn area, according to a memorandum by a British diplomat.”


At least 132 civilians killed in Burkina Faso’s worst attack in years.

The death toll from the worst militant attack in Burkina Faso in recent years has risen to 132, the government said on Saturday, after armed assailants laid siege overnight to a village in the jihadist-plagued northeast.”


Temperature rising in south Yemen as rivalries fuel power shortage

“In Yemen’s southern port city of Aden, Nawfal al-Mojamal struggles to keep Soviet-era machinery running at the main power plant as electricity outages fray the nerves of residents already fed up with poor services and political wrangling.”


Jordan security forces injured during night ‘riots’ in Amman. Jordan’s security forces have faced “armed attacks” in the capital Amman, according to the authorities, after tribal supporters of a lawmaker who was banned from the kingdom’s parliament clashed with the police on Saturday.”


Power Generator Owners In Lebanon Will Now Cut Electricity Supply For Up To 5 Hours A Day

Starting next week, electricity generator owners will begin rationing power by cutting the supply for around 4-5 hours a day, said the head of the Association of Power Generator Owners, Abdo Saadeh…”


Algeria: Despite Repression, 120th Friday Protest Draws Large Crowds

Algeria’s national protest movement marked the 120th Friday with a massive outpouring of disaffected citizens in the city of Tizi Ouzou.”


Scuffles broke out between protesters and police in the Tunisian capital on Saturday as demonstrators protested against an increase in prices of basic goods following the country’s recent negotiations with the IMF.

“Officers pushed back as protesters tried to break through police lines into a square in central Tunis near Parliament.”


Kremlin may restrict more food exports to shield it from high prices

“Maxim Reshetnikov, minister of economic development, told the Financial Times that Russia, one of the world’s biggest grain exporters, was considering how to best support its food exports while protecting domestic consumers from rising prices.”


Digital currencies pose threat to economy, warns Bank of England.

“The rise of digital currencies could lead to a flood of withdrawals from high-street banks, risking financial stability and the wider economy, the Bank of England has warned.”


Unregulated Cryptocurrency Bubble Could Send the Economy Into a Tailspin

The sudden “sprint” by regulators to examine cryptocurrencies might come too late, with the entire market on the brink of collapse. A sell-off earlier this month saw cryptocurrencies lose some $1 trillion in value in a week, from a peak global market cap of $2.5 trillion on May 11.”


NFT bubble pops: Market implodes with sales falling 90% in a month after craze for buying memes and viral videos suddenly fades..

An NFT, short for non-fungible token, is a unique digital token encrypted with an artist’s signature and which verifies its ownership and authenticity.”


A New Way To Hide Debt…Again.

““Non-Commenced leases” are the new version of operating leases, an accounting loophole that companies used to hide debt off-balance sheet prior to Accounting Standards Update (ASU) 2016-02. This new accounting trick is another in the long history of companies exploiting loopholes in Generally Accepted Accounting Principles (GAAP) to manage earnings and make it more difficult for investors to understand the true profitability of a firm.”


Global debt rises $32 trillion in 2020 amid Covid pandemic: Moody’s.

“The Covid-19 pandemic and its aftermath has pushed the global debt higher by $32 trillion in 2020 to $290.6 trillion led by government and non-financial corporate debt, and will continue to rise in 2021, said a latest release by Moody’s Investor Service (Moody’s).”


COVID-19 recovery: some economies will take longer to rebound – this is bad for everyone.

“National economies are beginning to return to their pre-pandemic levels. But like the uneven impact of the pandemic itself, the pace of economic recovery is massively divergent across countries.”


First Thing: economic toll of climate crisis ‘will be like two pandemics a year’ [an understatement]…

“Oxfam and the Swiss Re Institute have warned that the G7 countries will lose 8.5% of GDP a year, the equivalent of nearly $5tn, within 30 years if temperatures rise by 2.6C (4.7F), as they are predicted to.”


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.

5th June 2021 Today’s Round-Up of Economic News

Climate crisis will collapse our financial system, IMF official warns… Climate change could “absolutely” ignite a financial crisis, according to a top official from the International Monetary Fund.

“”The climate crisis is slow in the making, but it’s potentially disastrous,” Tobias Adrian, director of the IMF’s monetary and capital markets department, told CNN recently, adding, “There are many countries where you see the climate catastrophe is catastrophic for the financial system.””


Federal Reserve Chairman Jerome Powell acknowledged serious risks the climate crisis poses to the world economy and called for a coordinated response that is led in the United States by elected officials.

“”There is no doubt that climate change poses profound challenges for the global economy and certainly the financial system,” Powell said Friday while speaking virtually at the Green Swan Conference.”


The Federal Reserve’s plan to begin unwinding its unprecedented backstop of corporate debt is rekindling an idea that many have warned about: that investors are now convinced that the central bank will bail them out again if needed

The Fed is a bit like a helicopter parent when it comes to the bond markets,” said Nicholas Elfner, co-head of research at Breckinridge Capital Advisors. “Their involvement in the bond market is assumed at this point.””

[It’s no surprise – of course the system will become tolerant to and reliant on each new infusion of monetary methadone.]


A year after peak job losses, the US recovery has been slow to arrive.

“Government data shows unemployment rates for many groups remain high, even as post-pandemic hiring picks up… Employers say they are struggling to hire workers, and yet the US is still 7.6m jobs short of where it was before Covid-19 struck.”


Biden Infrastructure Plan Endangered by Dire U.S. Shortages.

“The biggest threat to President Joe Biden’s vision of energizing the U.S. economy with the largest infrastructure program in decades may not be its challenging path through Congress, but a dire shortage of everything from workers to cement mills.


China is pushing China Huarong Asset Management Co to sell non-core assets, two people involved in the revamp told Reuters, while considering offering an implicit guarantee of the liabilities of the debt-laden bad-debt manager

“The plan, one source said, envisions the authorities informally backing $20 billion of dollar debt coming due this year for the sprawling company, one of the nation’s four giant state-owned asset managers.”


Creditors seeking $187 billion from China’s bankrupt HNA Group – executive quoted.

“China’s HNA Group Co (HNAIRC.UL) said some 67,400 creditors are seeking a total of 1.2 trillion yuan ($187 billion), according to a person who attended the conglomerate’s online meeting for creditors on Friday.”


Grinding higher: Emerging market central banks raise rates in May

““EM central banks are reluctantly turning more hawkish, due to price pressures amid higher demand and supply constraints,” said Christian Keller at Barclays.”


Kerala [India] had landed in a financial crisis much before the outbreak of Covid. In the last 15 months, the crisis deepened as the pandemic gripped the state.

“The financial crisis now faced by the state is the worst since its formation.”


CFG Advisory says Nigeria is now faced with stagflation, a situation that is more protracted than a recession. They also note that monetary policy has reached its limits…”



Devils’ dance, praying to end crisis in Venezuela

Catholic devotees in the Venezuelan town of Naiguata on Thursday participated in the “Dancing Devils” tradition, despite COVID-19 restrictions and an economic crisis. Many coastal towns in the Guajira region, north of capital Caracas, also took part in the ancient tradition…”


Civil unrest and road blockades in Colombia have forced Toronto-listed Frontera Energy to shut in heavy oil production from its operations at Block CPE-6 in the eastern Llanos basin

“Colombia has been suffering from waves of protests and civil unrest since April.”


While everyone is talking about inflation and whether it will stick around, Ed Yardeni, president of Yardeni Research, says last week’s oil-sector news may have set the stage for the next recession

““I’ve often observed that recessions are usually caused when the tightening of monetary policy triggers a financial crisis, which turns into a widespread credit crunch and results in a recession,” Yardeni wrote in a note to clients Wednesday. Perhaps less appreciated: a spike in oil prices often causes, or at least exacerbates, recessions.”


No fruit, no milk: Israelis still suffering economic fallout of pandemic.

“Recent report shows that coronavirus outbreak and subsequent financial crisis have led to massive household cutbacks, more than half of entire population making tough choices about food, buying fewer dairy products, fruit and vegetables.”


As economic crisis wears on, Lebanese can’t even afford manoucheh

“As increasing numbers of Lebanese families struggle to make ends meet amid the economic collapse, simple foodstuffs such as the traditional manoucheh are becoming a luxury that few can afford.”


What’s driving the surge in food prices and what are the knock-on effects?

“Weather is obviously a huge issue in food production… [and] the pressure on supply chains has affected production and distribution of food.”


What are the limits to government borrowing?

“…As crisis has hit and interest rates have fallen, politicians have felt more able to run up debts than in the past. But the issue of whether and when limits to borrowing might apply still remains. Recent research casts light on these constraints.”


Rising government debt and the banking doom loop… the fact remains that governments have been addicted to easy money and debt-funded growth for many years now

With interest rates across the world at or near historic lows, the cost of these debts to governments has thus far been manageable. However, going forth, in a less sedate interest rate environment, managing this massive debt overhang is likely to throw up numerous challenges, with the potential for a banking doom loop a key challenge.”


Pity the central bankers: No easy way to stop rising inflation or bubble-bursting… One has to pity Federal Reserve Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde…

“…both find themselves damned if they begin to taper their aggressive bond-buying programs and raise interest rates. However, they also find themselves damned if they do not begin monetary policy tightening.”


You can read the previous ‘Economic’ thread here. I’ll be back on Monday 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.

3rd June 2021 Today’s Round-Up of Economic News

As the pandemic subsides, here comes the crisis… When it comes to the economics of COVID-19, the worst symptoms may not appear until the virus has gone into remission…

Civil unrest has increased in the wake of other recent pandemics, a recent International Monetary Fund Analysis found, peaking an average of two years after the health threat passes.”

[47 jurisdictions around the world were already experiencing significant social unrest in 2019 before the pandemic started].


It’s 1979 again but with quadruple the debt burden. The Fed prays that inflation will fix itself and the mess will prove ‘transitory’ but things keep getting worse

“The Biden Administration’s attempt to shove $5 trillion in demand through America’s sclerotic supply chains has produced simultaneously a demand-side shock (sudden increase of spending power) and a supply-side shock (US firms can’t produce or ship goods on order).”


UK Banks battle it out in mortgage price war.

The soaraway housing market rekindles memories of 2008 when a lending spree triggered the worst financial crisis for decades.”


Global Economy Rebounding, Faces Multiple Threats

“The global economic rebound from the pandemic has picked up speed but remains uneven across countries and faces multiple headwinds. Most worrisome: the lack of vaccines in poorer nations, which could lead to new virus variants and more stop-and-go lockdowns.”


Vietnam’s ‘very dangerous’ new hybrid variant may be fueling its worst outbreak so far

“Vietnam’s plight follows a now familiar pattern of Covid-19 surges across Asia – most alarmingly in countries like Singapore, Laos, Thailand and Taiwan that were praised for beating the virus in 2020, only to be caught out by a global vaccine shortage as new variants ricocheted back from coronavirus hotspots.”


Malaysia protests ‘suspicious’ Chinese air force activity over South China Sea.

“The foreign ministry of Malaysia has said it would summon China’s envoy to explain an “intrusion” by 16 air force planes into its airspace, after the south-east Asian country’s military detected “suspicious” activity over the South China Sea.”


While China’s borders remain closed, the global economy suffers… China’s current border policy is having a cumulative long-term effect across the global economy…

The problem is that opening the borders is hard to reconcile with Chinese people’s expectations of zero Covid cases.”


Why China is reining in the renminbi.

On Monday, China’s central bank yanked a policy lever it hasn’t touched since the global financial crisis, signaling Beijing’s determination to rein in a currency rally that has seen the renminbi surge to its strongest level against the dollar in three years.”


Nigeria’s crude oil export revenues slumped by as much as 98 percent from March to April this year because of movements in the price of gasoline…

“The oil and gas industry in Africa’s largest oil producer accounts for… as much as 86 percent of total export revenues.”


Total global revenues from oil and gas taxes are set to approach the $1-trillion mark in 2021, but unlike in pre-COVID times, the world will never again see such high revenues from oil and gas, Rystad Energy said in an analysis on Wednesday.”


Colombia extends border closure with Venezuela… in recent months, the border has… been the site of violent clashes between the Venezuelan army and armed groups operating in Colombia…

Prior to the pandemic, hundreds of Venezuelans used to cross into Colombia daily to buy food, medicine and supplies that are lacking in Venezuela, a nation suffering from poverty and hyperinflation.”


Brazilians bang pots in protest as another 2,500 die of COVID-19.

“Pot-banging protests erupted across several cities in Brazil on Wednesday evening as President Jair Bolsonaro addressed the nation, just days after protestors took to the streets across the country over his handling of the coronavirus pandemic…”


Argentina navigates pandemic with 60% of children in poverty

“High inflation and Covid-19 restrictions have curbed an economic rebound, after the pandemic dealt a critical blow to Argentina’s economy, which was already going through a now three-year-long recession.”


Turkish lira crashes to record low on Erdogan’s call for rate cut

“Erdogan’s frequent calls for lower borrowing costs and his abrupt removal of three central bank chiefs in less than two years has eroded Turkey’s monetary credibility and left it more vulnerable to high inflation and financial crisis.”


Eight killed in protests against Kurdish-led forces in northern Syrian city

“The protests took a violent turn when hundreds of demonstrators marched near checkpoints around the city a day after one civilian was killed in protests that swept the area demanding the end of Kurdish minority rule over a mainly Arab tribal population.”


World Bank: Lebanon’s crisis among world’s worst since 1850s.

“Lebanon’s severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years, the World Bank said in a report released Tuesday.”


Lebanon is a ticking time bomb the world cannot afford to ignore

“Lebanon… hosts hundreds of thousands of Syrian and Palestinian refugees. If the state collapses, these refugees could not return to their original homes in Syria and Palestine; rather, they would likely head towards Europe.”


Pandemic plunges 100 million more workers into poverty: UN… the labour market crisis created by the pandemic was far from over, the UN’s International Labour Organization warned in a report.

Employment was not expected to bounce back to pre-pandemic levels until 2023 at the earliest, it said.”


The great private jet shortage? …used cars are currently mooning because of a combination of pent-up demand and supply-chain disruption.

“And it turns out that automobiles aren’t the only used vehicles that are in short supply: the number of second-hand private jets for sale is also at an all-time low.”


How the Covid shock has radicalised generation Z

“Like their predecessors in the uprisings that followed the 2008 crisis, this generation of young people is ready to draw systemic conclusions from the way political elites have handled the pandemic. They know they will be paying higher taxes, carrying bigger personal debts and facing more uncertainty than any generation since the second world war.”


COVID-19 trauma has changed economics — maybe forever

In 2020, the doctrine of austerity went into rapid retreat all over the world… The IMF noted concerns about rising debt levels but said a bigger risk was that governments would curtail their spending too soon.”


Currency debasement – lessons from Weimar Germany

“…fears over the impact of excessive state intervention have resurfaced, thanks to the support measures introduced following last year’s virus outbreak… Weimar Germany’s convulsions in the interwar years provide a sobering historical perspective for those in fear of hyperinflation and dollar collapse.”


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.

1st June 2021 Today’s Round-Up of Economic News

‘Wuhan lab leak’ may be the biggest economic shock for decades: If intelligence services find a Chinese lab really did create Covid then global trade would collapse, triggering a huge financial crisis

“Here is the important question for the markets… and one no one is thinking about yet: what if it is true? It would be the biggest shock to the global economy in decades. Why? Because governments would surely have no choice but to retaliate with sanctions and demands for full-scale reparations.”


‘There are ghosts in the land’: how US mega-dairies are killing off small farms

“Across the US, dairy farmers have struggled beneath the weight of an industry-wide economic crisis. T​he cause ​is the massive overproduction of milk by large dairy operations, which has​ ​saturated the market, ​driving prices ​down well below the cost of production.”


Americans stress over ‘unshakeable burden’ of student loan payments. Borrowers are awaiting relief from the Biden administration while the pause on federal student loan repayment is set to expire 30 September.”


UK water retailers face collapse due to unpaid bills

“Most participants in the market were lossmaking before the pandemic but an increase in non-payments during lockdown has piled on the pressure. There is now a “material risk of systemic retailer failure”, said the report by the consultancy Economic Insight.”


Call for protection on Covid loan debts [UK] as the bounce-back payback begins

“…campaigners say banks may find it difficult to do right by struggling borrowers, given the pressure to recover cash, [which] could lead to a run of bankruptcies.”


France Is Ready to Start Cutting Back Crisis Aid, Minister Says.

“France is ready to start reducing financial support to businesses and workers hit by coronavirus restrictions as its vaccination program offers a route out of the crisis, Labor Minister Elisabeth Borne said on Sunday.”


How [Australian] housing prices could crash if China takes revenge and cuts off Australia’s iron ore – and it’s only a matter of time

The communist superpower has indicated plans to axe Australia’s biggest export earner and diversify its iron ore supplies as tensions between the two nations continue to simmer.”


China’s factory activities growth started a slowdown in May as Chinese firms are struggling with higher raw material costs

“Although China continues its economic recovery from COVID-19, officials warn that the foundations of the recovery are not secure due to higher raw material prices and the outbreak of COVID-19 in parts of the world.”


China’s ruling Communist Party will now allow couples to have three children instead of two in a drive to reverse its ageing population.

“According to state-run news agency Xinhua, the change in policy was approved during a politburo meeting chaired by President Xi Jinping.”


“Cash shortage threatens a banking crisis in Myanmar

“Myanmar is in the grip of a cash shortage. Since the military overthrew Aung San Suu Kyi’s government in February and tens of thousands of people walked off their jobs, banks have placed caps on withdrawals, causing crowds to gather at branches every day.”


Horses starve to death as pandemic hits Bangladesh tourism.

“The South Asian nation of 168 million people is battling a fresh wave of coronavirus infections that has stretched its healthcare system and triggered a nationwide lockdown. The horses’ owners said they were struggling to afford fodder for their animals…”


Hunger stalks India’s poor in pandemic double blow

“The coronavirus has killed 160,000 in eight weeks, overwhelmed hospitals and shut many businesses in India. Experts warn that another crisis is looming, with rising levels of hunger among poor Indians already reeling from a first lockdown last year.”


The Giant of Africa Is Failing.

Nigeria is in big trouble… Criminals, separatists, and Islamist insurgents increasingly threaten the government’s grip on power, as do rampant corruption, economic malaise, and rising poverty.”


Colombian troops tighten grip on Cali following more protests.

“Colombian President Ivan Duque deployed troops in Cali and other parts of the country following the latest round of violent anti-government protests. Dozens of demonstrators died in a month of rallies, many at the hands of security forces.”


The global chip shortage, which has affected electronics companies all over the world, may continue for the next two years, Intel chief executive officer (CEO) Pat Gelsinger has said…

“Gelsinger also said that the entire supply chain will have to “rise to the occasion” to get past the shortages.”


Crypto Assets a Great Concern, Says Ireland’s Central Bank Enforcer.

““Crypto assets are quite a speculative, unregulated investment,” and people should be “really aware they could lose the whole of that investment,” the central bank’s director general for financial conduct said in an interview.”


Banks block payments to crypto exchanges

“Banks are cracking down on transfers to cryptocurrency exchanges by suspending payments to the sector amid rising fears that it has become a hotbed for financial crime… Customers of banks including Barclays, Monzo and Starling are among those to have been blocked…”


CEO pay rises to $12.7M even as pandemic ravages economy

“…pay packages rose yet again last year for the CEOs of the biggest companies, even though the pandemic sent the economy to its worst quarter on record and slashed corporate profits around the world.”


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.