Daily updates on climate change and the global economy.

29th September 2023 Today’s Round-Up of Economic News

Thank you all for bearing with me in my absence; my batteries needed a recharge, and a huge thank you to Kali and team for holding the fort so diligently in my absence. On to today’s thread:

“Government borrowing costs soared around the world yesterday as mounting concerns over the global economy wreaked havoc on the bond markets [picture is of UK Chancellor, Jeremy Hunt].

“As investors fretted over persistent inflation and ‘higher for longer’ interest rates, bond yields rose in the United States, Britain and across Europe. That threatens to push up borrowing costs for households and businesses – further denting the economy.”


“Collateral damage and the mounting risk of a global ‘Liz Truss’ accident. A perfect storm is emerging in America’s turbulent bond market…

“Yields on 10-year Treasuries – the anchor price of world money – have risen by 120 basis points since mid-May, touching a 15-year high of 4.7pc this week. This is a greater credit shock than the stress that triggered the collapse of Silicon Valley Bank and its regional peers in February.”


“Extreme fear is haunting markets again. Here’s why investors are running scared.

“CNN’s Fear and Greed Index, which tracks seven indicators of market sentiment in the United States, tipped into “extreme fear” Thursday for the first time since March, when a banking crisis was sowing panic among investors.”


“Moody’s warns of ‘systemic risk’ from leveraged lending market…

“Credit rating agency Moody’s has warned of a “race to the bottom” between banks and private credit funds financing risky leveraged buyouts, a contest it believes will increase systemic risks across the US financial system.”


“Surging oil prices: a new concern for central banks.

“Surging oil prices have become a new concern for central banks, aggravating the current ‘trilemma’ of how to balance slowing economies, still too-high inflation and the delayed impact of unprecedented rate hikes.”


“Saudi Arabia and Russia Win Big in Gamble on Oil Cuts.

“Saudi Arabia and Russia have raked in billions of dollars in extra oil revenues in recent months, despite pumping fewer barrels, after their production cuts sent crude prices soaring… The extra funds are also ensuring Russian President Vladimir Putin can sustain his war in Ukraine.


“Shale Isn’t Coming to the Rescue…

“U.S. shale companies aren’t rushing to drill more. That means that unlike in past years when frackers flooded the market with crude and alleviated pressure, oil prices might remain elevated until someone else adds production or demand ebbs [or demand craters if we have a major debt crisis].


“America’s emergency oil reserve is at a 40-year low — and that could inflate oil prices, Goldman Sachs says.

“America’s emergency oil stockpile has plunged to 40-year lows. The shrinking Strategic Petroleum Reserve is limiting Washington’s ability to shield consumers from the fallout of Saudi Arabia’s aggressive supply cuts, according to Goldman Sachs.”


“JUST IN: US net interest payments as a percentage of government receipts rise to 15%.

“This percentage has doubled over the last 2 years and now is at its highest since 1998. The US is about to see its first ever year with $1 trillion+ in interest expense. At the same time, US Federal tax receipts are now down 8.4% on a 12-month basis. We have rapidly rising debt levels with rising rates and falling government revenues. What’s the game plan here?”


“There’s a 90% chance of a government shutdown: Goldman Sachs.

““A shutdown this year has looked likely for several months, and we now think the odds have risen to 90%,” Jan Hatzius, chief economist and head of global research at Goldman Sachs, wrote in a note to investors. Hatzius and his team say the most likely scenario is the government will shut down on Oct. 1.”


“Costco is selling gold bars and they are selling out within a few hours.

“Costco is well-known as a place to get bargain prices on any variety of items, from food to luggage to appliances to gold bars. Wait, gold bars? Yes, the retail warehousing giant is your one-stop shop for 1 ounce gold PAMP Suisse Lady Fortuna Veriscan bars, handsomely detailed and ready for purchase.”


“US consumer spending was much weaker in the second quarter than previously estimated…

“…consumer spending, America’s economic engine, was revised much lower, to a 0.8% annualized rate, according to data released Thursday. That’s down from the 1.7% rate reflected in the previous estimate. Spending in the second quarter grew at its weakest pace since the first quarter of 2022, when it was flat.”


“US mortgage rates surged to their highest level in nearly 23 years this week as inflation pressures persisted.

“The 30-year fixed-rate mortgage averaged 7.31% in the week ending September 28, up from 7.19% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 6.70%.”


“London is suffering an office ‘recession.’ Meta just paid $181 million to dump a lease.

“London’s office market has plunged into a “rental recession,” with the share of empty space hitting its highest level in three decades, investment bank Jefferies said in a note Wednesday. The New York-based firm said vacancies in the City of London, the UK capital’s historic financial district, accounted for 10% of the area’s total office space…”


“Too much [UK] government borrowing is undermining faith in official economic forecasts, the Institute for Fiscal Studies has warned.

“The think tank said a raft of unexpected and expensive policies rolled out by recent Chancellors had led to a surge in the size of the state and fuelled Britain’s deficit, while also making forecasts less accurate.”


“Watering down water – how Rishi Sunak’s reneging on climate commitments makes zero difference… What no-one is admitting… is that the UK’s net-zero plans along with those of every government on the planet, were already 100% inadequate…

“Put simply, far worse things are happening far, faster than expected but our ‘net-zero’ targets and related actions remain based on old, massively out-of-date (aka wrong), much less severe projections.”


“Britain has given the go-ahead to develop the UK’s biggest untapped oilfield off Shetland, sparking outrage from environmental campaigners.

“The UK oil and gas regulator’s decision to grant the Oslo-listed Equinor and the British firm Ithaca Energy permission to develop the Rosebank oil and gas field in the North Sea was condemned by the Green party MP Caroline Lucas as “the greatest act of environmental vandalism in my lifetime”.”


“Germany Seeks to Lock In LNG Deals to Avoid Cargo Diversions…

“Germany wants to lock in contracts for liquefied natural gas with a delivery obligation, an effort to deter profit-chasing traders from diverting shipments elsewhere as the nation boosts its commitment to the fuel.”


“German economic slump will be worse than feared, warn economists…

“Oliver Holtemöller at the Halle Institute for Economic Research said the recovery from the energy crisis has been painfully weak. He said: “The most important reason for this revision is that industry and private consumption are recovering more slowly than we expected in spring.””


“Germany announces border controls to combat migrant surge.

“Germany will introduce new border controls with Poland and the Czech Republic this week, the German interior minister announced on Wednesday, saying that more should be done to protect the European Union’s fragile system of open borders.”


“Italian PM steps up crackdown on migrants with deportation decree.

“Foreigners who lie about their age to benefit from a protection scheme reserved for unaccompanied minors arriving in Italy will be deported under a security decree expected to be approved by Giorgia Meloni’s cabinet on Wednesday as part of her far-right government’s crackdown on irregular immigration.”


“European bond market hit by Italy’s plans for higher borrowing.

“European government bond prices dropped sharply on Thursday as investors took fright at Italy’s larger than expected budget deficit and mounting concerns that central banks will keep interest rates high for an extended period.”


“Eurozone bank lending still under pressure from higher rates.

“Bank lending to businesses in the eurozone dropped sharply in August while household borrowing ticked up slightly. Overall, higher rates and weak economic activity will dampen investment in the quarters ahead, keeping economic activity sluggish at best.”


“Wow chart! Based on SWIFT international payments, we are witnessing ‘de-euroization’ and not ‘de-dollarization’. The euro’s share in SWIFT global payments has dropped to 23% from 38% at the start of the year.

“Are Russia’s SPFS and China’s CIPS eating up the euro? By the way, China’s share in SWIFT payments reached an all-time high of 3.47% in August!”


“Fuel Hoarding Unnerves Polish Refiner in Push to Cut Prices.

“Poland’s state-controlled refiner Orlen SA appealed to Poles to refrain from hoarding fuel following reports that its bid to hold down prices is causing shortages of diesel at some gas stations… Orlen’s attempt to shield Poles from rising global oil prices ahead of a parliamentary election on Oct. 15 is starting to backfire.”


“Moscow Mulls New Steps to End Domestic Fuel Crisis…

“Moscow is proposing a number of additional measures to resolve the crisis on the domestic oil products market on top of the gasoline and diesel export ban introduced last week… proposed steps include increasing the duty for the so-called “gray” exporters that buy products on the domestic markets for sale outside the country…”


“China’s Latest Move Could Further Raise Global Diesel Prices…

“China may not issue additional fuel export quotas this year, which could further raise global diesel prices amid tight supplies and a still unknown duration of a Russian export ban currently in force. The Chinese authorities have already told the biggest oil refiners in the world’s top crude oil importer not to rely on more fuel export quotas for the rest of the year…”


“China’s economic activity again weakened in September, China Beige Book survey shows…

“China’s small economic rebound appears to have stalled in September, with retail sales and pricing power as well as manufacturing production and loan growth weaker than the print for the month before, according to the monthly China Beige Book survey released Friday.”


Evergrande founder ‘being investigated for suspected crimes’…

“Evergrande Group, which has more than $300bn (£245bn) in total liabilities, did not say whether Hui Ka Yan was still in a position to run the company, or what crimes he was being investigated for. The news came hours after trading in shares of the company was suspended following a report that Hui had been placed under police surveillance.”


“Souring Global Office Bets Raise Risk of Korean Liquidity Crunch…

“Investors in few, if any, countries in the world have been burned as badly by the collapse in the commercial real estate market as those in South Korea. Its pension funds, insurance companies and asset managers all plowed billions of dollars into properties across the globe just before the pandemic drove down their value.”


“Rising poverty grips Argentina as runaway inflation takes its toll.

“Homeless shelters in Argentina’s capital are seeing demand soar as more people are struggling to make ends meet amid an annual inflation rate above 100% that is pushing more people into poverty.”


“Brazil minister says oil and green ambitions are not contradictory.

“…in the same week that Lula was telling the UN General Assembly that the climate crisis “knocks on our door, destroys our homes, our cities, our countries, kills and imposes suffering on our brothers”, Silveira was arguing that exploratory drilling in an ecologically sensitive area where the Amazon river meets the Atlantic should go ahead.”


“Cuban officials have warned that blackouts on the island will increase significantly due to a lack of fuel, potentially worsening the country’s plight as it deals with food and medicine shortages.

“Local governments have already begun announcing restrictions on power usage at state-run companies and other entities, including moves to postpone sporting events and university classes.”


“Broken infrastructure, drought cause power rationing in Tanzania, official says.

“Maintenance issues and climate change-induced water shortages have caused a 400-megawatt electricity shortfall in Tanzania, triggering power rationing across the East African nation, the state power supplier said… only 38% of Tanzanians have power, according to the World Bank.”


“Serbia observes national day of mourning after clashes in Kosovo…

“The killing of a Kosovo police officer and an ensuing gun battle at a monastery in a village close to the Serbian border marked one of the gravest escalations in the former breakaway province in years. Three Serb gunmen were killed in an hours-long firefight with Kosovo police…”


“Over half of Nagorno-Karabakh’s population flees as the separatist government says it will dissolve.

“The separatist government of Nagorno-Karabakh said Thursday it will dissolve itself and the unrecognized republic will cease to exist by year’s end after a three-decade bid for independence, while Armenian officials said over half of the region’s population has already fled.”


“Malaysia grapples with rice shortage amid global price surge…

“Ameer Ali Mydin, managing director of Mydin, a chain of large supermarkets, told Nikkei Asia the shortages are caused by the growing gap in prices between locally produced rice and imported varieties… The country mostly imports white rice from India, Pakistan, Thailand, Vietnam and Cambodia.”


“Climate change, El Nino, Russia war fuel food price surge…

“How do you cook a meal when a staple ingredient is unaffordable? This question is playing out in households around the world as they face shortages of essential foods like rice, cooking oil and onions. That is because countries have imposed restrictions on the food they export to protect their own supplies…”


“Households lost a record €6.6 trillion across the world in 2022…

“2022 was a “turning point” for global wealth, says German financial company Allianz in its latest Global Wealth Report. 2022 was a horrible year for savers as asset prices fell, cutting down savings across 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. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

27th September 2023 Today’s Round-Up of Economic News

dry queen creekThe U.S. needs minerals for green tech. Will Western mines have enough water?

“There’s still going to be places where you say, yes, there’s lithium in the ground here, but this is a no-go,” Boulanger says. “We’re going to have to make some choices in a world that’s already experiencing the effects of climate change.

“What’s not our drinking water today, in five years we may already be relying on it.”


us treasury graphUS Treasury ETF suffers biggest meltdown on record as rates continue to surge

The iShare 20+ Year Treasury Bond ETF has declined 45% from its closing high in 2020, and is down a whopping 50% from its intra-day high reached on March 9, 2020. That’s the biggest decline the ETF has suffered since its July 2002 inception. The ETF is now trading at its lowest level since February 2011.

The sharp declines have snowballed since the Federal Reserve began hiking interest rates in 2022 in its ongoing bid to tame inflation. And the declines could get even worse if the Fed moves forward with further interest rate hikes, something Fed President Neel Kashkari believes is more likely than not.


bank credit declineUS credit crunch advances

It will be interesting to see what effect the latest round of rising yields does to small banks. Recall that it was bond losses that triggered the small bank crisis. More to come there.


student loansPeople with student loans regret borrowing too much

Americans are facing a mountain of student loan debt, totaling more than $1.7 trillion, and it’s a serious source of stress for many borrowers. In fact, almost a quarter of people who have student loan debt say borrowing too much is their biggest financial regret, according to a recent Bankrate survey. “I think what this shows is student loan debt can really become a huge inhibitor for Americans to grow their wealth,” said Bankrate’s Sarah Foster. “They say that they haven’t really been able to buy a house because of that debt. Some of them are delaying getting married or having children.”


ecbCentral banks across Europe pause for breath after mammoth rate hike run, but face ‘triple dilemma

High inflation continues to plague European households and businesses, and central banks in the region have yet to declare victory on bringing it to target.

But September marked a change in tone in their messaging, as some central banks put the breaks on interest rate hikes after nearly two years, while others appeared to be at the brink of peak rates. This has turned market attention to how long rates will be held at current levels, amid strains on economic growth.

…The recent surge in oil prices poses an additional headache, he added, potentially fuelling inflation while dragging on economic growth — and making future interest rate decisions even more difficult to call.


worker at chinese coal facilityWhat ‘peak oil’ will mean for China

China’s energy mix will shift towards coal and renewables

China has been the engine of global oil demand since its accession to the World Trade Organization in 2001. About half of the global increase in oil demand since 2000 has come from China, which has trebled its consumption over that period, according to estimates by BP.

[It’s talking about peak oil supply – not peak oil demand. Ha ha!]

[Financial Times]


canadian coal mineCoal makes a quiet resurgence in the clean energy era

A new report by the International Energy Agency found that global coal demand hit an all-time high in 2022 amid the energy crisis, eclipsing the previous record set in 2013.

While the IEA believes that coal consumption may soon hit its peak, along with demand for oil and gas, trends so far this year tell a different story. United States thermal coal exports reached their highest levels since 2018 in the first eight months of 2023, according to new data. Exports soared by 20% over the same period last year as Asian countries increased their demand for coal.

The green transition in US manufacturing also presents a bit of a paradox. For example, Panasonic built a new electric vehicle plant in Kansas to aid its transition to clean energy. But the factory’s vast energy needs have led the county where the factory is located to extend the life of a local coal plant.


hurricane disaster sceneFEMA delays $2.8 billion in disaster aid to keep from running out of money

The agency has paused aid for long-term disaster recovery in nearly every U.S. state and territory while scrambling to conserve cash in case a government shutdown collides with hurricane season

…it has also disrupted longer-term recovery projects in communities hit by past calamities, from flooding in rural Washington state to hurricane damage in Puerto Rico.

[Financial Times]


saudi arabia mbs at meetingSaudi Arabia announces crucial step forward in its nascent nuclear power plans

Saudi Arabia announced its commitment to building a nuclear energy program, as well as a pledge to allow greater oversight for atomic energy inspectors, at a time when the kingdom is pushing ahead with its drive to become a more powerful player on the international stage.


boy coal minersMuscle, wood, coal, oil: what earlier energy transitions tell us about renewables

In 2022, the burning of fossil fuels provided 82% of the world’s energy. In 2000, it was 87%. Even as renewables have undergone tremendous growth, they’ve been offset by increased demand for energy.

That’s why the United Nations earlier this month released a global stocktake – an assessment on how the world is going in weaning itself off these energy-dense but dangerously polluting fuels. Short answer: progress, but nowhere near enough, soon enough.


london skyscrapers‘Rental recession’: London office vacancies hit 30-year high

Jeffries analysts estimated there had been a 20% contraction in London office usage as working from home and hybrid working, as well as a move toward green offices, continue to be a priority.


chicago migrantsAs migrants clash near high-volume shelters, neighbors and businesses grow alarmed: ‘We don’t feel safe’

Over the weekend, a fight broke out near the 1,163-resident migrant shelter at the former Standard Club, 320 S. Plymouth Court, just the latest brawl to be caught on camera outside one of the high-population shelters downtown.

With the city buckling under the growing number of migrants — 12 buses carrying 560 more asylum hopefuls arrived this weekend — and no sign of the influx slowing down, tensions among migrants, residents and business owners are reaching a boiling point. The neighbors say they’ve witnessed frequent fights, loitering and other misconduct.

(Volunteers say buses of migrants arriving in Chicago at increased rate)

While most told the Tribune they fully support efforts to aid the migrants, they have grown weary of the city’s solution to cram thousands of people into highly trafficked shelters, and they’re concerned about safety — not only for themselves, but for migrants, too.

[Chicago Tribune]


staten island protestersOn N.Y.’s Staten Island, anti-immigration protests intensify as migrants stream in

Fossella says the city’s budget can’t handle taking care of so many migrants and Staten Island shouldn’t have to suffer the consequences. In fact, Fossella is one of several Staten Island leaders who has supported secession.


global trade graphGlobal trade falls at fastest pace since pandemic

Demand for goods exports weakens on the back of higher inflation, rate rises and spending on services

World trade volumes fell at their fastest annual pace for almost three years in July, according to closely watched figures that signal rising interest rates are beginning to impact global demand for goods.

[Financial Times]


You can read the previous “Economy” 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. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

25th September 2023 Today’s Round-Up of Economic News

strategic petroleum reserve graphDiesel fuel shortages could lead to a global economic crisis within months

Global diesel fuel shortages are rapidly emerging, and most in the western world are yet to recognise the catastrophic potential. What are the implications of worsening diesel fuel shortages?

Diesel quite literally fuels the global economy. Without it, the economy comes to a standstill.

As you read this article, just about everything in front of you required a truck, which required diesel, to get there.

Diesel fuel prices are already breaking out in just about every region on earth. It’s likely this is just the beginning of an extended period of extreme diesel prices.


man holding food receiptsFood Inflation Is Still High Around the World

In real terms, food price inflation exceeded overall inflation in 81% from 162 countries where data is available, the World Bank said in its latest food security update.



india china energy consumption graphIndia’s dream of green energy runs into the reality of coal

The biggest obstacle, however, is the lack of power storage. While coal plants can run 24 hours a day, the intermittent supply of solar and wind means it must be stored in batteries in order to provide continuous power.

While India’s National Electricity Plan expects the country will build enough storage by 2027 to avoid adding yet more coal plants to its pipeline, battery technology is prohibitively expensive and authorities are considering new subsidy schemes to bring down prices.

“[For] as long as we don’t have low-cost storage available, we need to have base power, and base power has to come from coal,” says Dhal, Odisha’s energy secretary.

[Financial Times]


credit cardsCredit card losses are rising at the fastest pace since the Great Financial Crisis

Credit card companies are racking up losses at the fastest pace in almost 30 years, outside of the Great Financial Crisis, according to Goldman Sachs.

Credit card losses bottomed in September 2021, and while initial increases were likely reversals from stimulus, they have been rapidly rising since the first quarter of 2022. Since that time, it’s an increasing rate of losses only seen in recent history during the recession of 2008.

It is far from over, the firm predicts.


sam woodsBanking regulator Sam Woods: ‘This is the most intense period since the 2008 financial crisis’

…he has two areas of concern right now: commercial property – where demand has declined amid the rise in remote working – and the downturn in China’s property market. “But if experience tells me one thing, it’s that the things you name are probably not the ones that blow.”


Eecb european central bankCB Must Not Test Economy Until It Breaks, Villeroy Says

Data later in the day showed only a marginal improvement in the business outlook in Germany, whose economy is expected to shrink this quarter. Clemens Fuest, who heads the Ifo institute that compiles the data, said sentiment “remains bleak.”



1973 energy crisis newspaper clipFifty years ago the energy crisis officially began, and it hasn’t ended

Weil is less optimistic, a half-century later.

“The difference now,” he said, “is we know what the problem is but we’re still very dependent on hydrocarbons. We just don’t have sufficient willingness to do what’s necessary.”


coal fired German plantGermany went from envy of the world to the worst-performing major developed economy. What happened?

Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.


biden and modiWill Asia’s food shortages be exacerbated by new Global Biofuels Alliance, with crops diverted?

But analysts say that using more biofuels may result in the diversion of crops like sugar cane and rice for fuel, which could exacerbate food shortages and lead to more deforestation.

“This is coupled with the fact that burning biomass is a false solution to the climate crisis, since the urgency of this crisis means that there is not the time for these forests to grow back and absorb the carbon emitted from burning them,” he said.

Forests need to remain as carbon sinks rather than be degraded by industrial activities, he said.

“The scale and intensity of the biomass industry is such that forests come under threat both to directly being logged to feed biomass plants and to make way for palm oil and other crops to supply the industry,” Robertson added.

[South China Morning Post]


evergrandeChina Developers Drop Most in 9 Months on Evergrande Woes

Officials are rushing to stem the spillover from China’s property turmoil. Fears are mounting that the years-long crisis will next hit the nation’s commercial banks and keep home prices under pressure, further hurting consumer confidence. With the country being the world’s biggest consumer of iron ore, the sector’s downturn has already hurt the commodity market as construction companies pulled back from restocking before the holiday.


wall street traders Interest rates may be over, but trouble lies ahead

It is certainly possible that rate hikes may be finished. But while inflation is currently falling in most developed countries, there is every chance that it may still persist in the face of rising energy prices.

Saudi Arabia and Russia have indicated that they want to push global oil prices to $100, with the Brent oil price in Europe up nearly 31% over the last few months. These energy price increases are already noticeable in the motor oil inflation numbers in August, and it seems likely that they will become more pronounced in the coming weeks.


us capitol with currencyUS debt interest payments are unsustainable and flash ‘huge warning signs’ as they take over federal spending, budget expert warns

  • The trajectory of US debt interest payments is not sustainable, Maya MacGuineas told Insider.
  • Interest will eclipse defense spending in four years, the Committee for a Responsible Federal Budget president said.
  • By 2051, interest payments will be the single largest federal expenditure, topping Social Security.


You can read the previous “Economy” 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. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

22nd September 2023 Today’s Round-Up of Economic News

guns and butterThe Humanitarian Financial Crisis: Plenty of Guns and Little Butter

The tens of thousands of dead, injured and homeless in the recent earthquake in Morocco and the broken dams in Libya are the latest victims of natural disasters. Casualties in the Russia/Ukraine war add to the growing numbers of victims of armed conflicts around the world. The U.N. and partner organizations announced at the end of 2022 that 339 million people in 69 countries will need assistance in 2023. Unfortunately, at the same time the number of those in need of humanitarian assistance increases, the International Committee of the Red Cross (ICRC) is in a dramatic financial crisis.


roman soldiersThe Roman Empire’s Financial Collapse: Are We Witnessing History Repeat Itself?

Last year, billionaire investor Carl Icahn noted that rampant inflation was a key factor that brought down the Roman Empire. He also warned investors that “the worst is yet to come.”

“We printed up too much money and just thought the party would never end,” he said.

Icahn also cautioned that “inflation is a terrible thing” and “you can’t cure it.”


india banking liquidity crisisIndia’s banking system faces severe liquidity deficit

The widest liquidity deficit in more than four years is grappling India’s banking system. The nation’s financial institutions are facing unanticipated difficulties due to record central bank borrowings and a significant outflow of funds for tax payments.


declining creditTech sector feels credit crunch

Technology businesses are facing a funding squeeze as venture capital (VC) firms rein in their investing. James Dowdall, partner – deals advisory at ReSolve said that the advisory firm is seeing increasing numbers of restructuring challenges among tech businesses…The cash runways are pretty short; sometimes these companies only have three months before they will run out of money.”


reserve bank of indiaHousehold savings fall to decades low, borrowing rises [India]

RBI’s data said the rate of increase in financial liabilities in FY22 was the second highest since Independence. The only time the flow was sharper was in Financial Year 2006-07 when it was 6.7 per cent.

The primary cause of decreasing savings and increased borrowing is likely the combination of stagnant or declining household incomes in the face of rising inflation.


four central banksGlobal central banks unite in ‘higher for longer’ credo

Despite gradually cooling, inflation in most large economies remains well above the target 2% level which central bankers deem healthy. In August it stood at 3.7% in the United States and 5.2% in the euro zone.

But investors remain sceptical that central banks will stay the course given doubts over the strength of the Chinese economy and geopolitical worries from the Ukraine war to U.S.-Chinese rivalry.

“By this time next year, we anticipate that 21 out of the world’s 30 major central banks will be cutting interest rates,” Capital Economics wrote in a commentary entitled “A tipping point for global monetary policy”.


chinese hydropower plantChina, India lead Asia’s biggest hydropower crunch in decades

“Despite a strong growth in solar and wind power generation in Asia, supply from fossil-fuel thermal power plants has also increased this year as a result of a large decline in hydropower generation,” said Carlos Torres Diaz, Rystad Energy’s director of power and gas markets.

“Intense and prolonged heatwaves across the region have resulted in low reservoir levels and the need for alternative sources of power to help meet demand,” he added.


diesel pumpRussia’s indefinite ban on diesel exports threatens to aggravate a global shortage

 Warren Patterson, head of commodities strategy at ING, said in a research note published Friday that Russia’s ban on fuel exports was a major development ahead of the Northern Hemisphere winter, a period which would typically see a seasonal pick-up in demand.


woman worried about bills34,915 Adults in Westminster ‘Rationing heating or electricity to keep up with debt payments’

34,915 adults in the City of Westminster are forced to cut back on essentials like heating and electricity to keep up with debt repayments. 57,609 are in financial difficulty, and 21,822 have changed their diet to less healthy options to save cash.


yen billsYen’s buying power sinks to all-time low amid sustained deflation

Currency drops below 1970 value, raising travel and import costs for Japanese


uk restaurantUK recession risk grows as higher interest rates weigh on firms

Service sector and manufacturing output falls, with cost of living crisis also hitting businesses

Williamson said: “The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK. Underscoring the severity of the UK’s deteriorating situation, September’s downturn is the steepest since the height of the global financial crisis in early 2009, barring only the pandemic lockdown months.”

Sandra Horsfield of the investment bank Investec said: “The trend in total retail spending volumes has been broadly sideways. The economy is entering more troubled waters and a [relatively mild and short-lived] recession is likely to ensue this winter.”

[I guess The Guardian put that in: [relatively mild and short-lived] LOLOL!


zero sum credit graphicAre we destined for a zero-sum future?

A backdrop of slower economic growth may be shaping attitudes of tomorrow that cut across political divides

A recent suite of experiments in the UK and US also found consistent evidence that zero-sum thinking predisposes people to downplay the potential benefits of trust and co-operation, and see others as potential rivals or threats rather than partners and collaborators.

[Financial Times]


workers load riceIndia Rice Export Ban Is Fueling Risk of Social Unrest, UN Says

Africa’s reliance on rice imports makes it vulnerable to bans

  • UN agency head says rice is now main concern to food security
  • Soaring prices are fueling concerns about food insecurity for billions of people in Asia and Africa who depend on the grain.

“Rice, especially in Africa, can certainly bring potential conflict or social unrest, which at this moment in time would be quite dangerous,” Alvaro Lario, who leads the International Fund for Agricultural Development, said in a Thursday interview in New York.



kitty litterA stranger in your hotel room? Kitty-litter shortages? Online attacks are causing real-world effects.

While Nicoletti hopes executives don’t take the wrong lesson from this experience and start paying ransoms, he does believe that real-world problems from a cyberattack should be a “wake-up call” for consumers, who should “really look at the people they have relationships with, and look to see what their security posture is.”

Yaverbaum agrees, saying “for mainstream America — us pedestrians who just buy stuff, all of us — the only way that we’re going to get educated and be aware is the hard way.”

“This is going to touch every single company, every single consumer in this country over the course of the next decade, bar none,” he said. “It’s not a crazy prediction to make. We’re not ready for what’s coming. “


You can read the previous “Economy” 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. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

20th September 2023 Today’s Round-Up of Economic News

Climate refugees: The unseen financial crisis of our era

As climate change accelerates, the world faces a growing crisis: climate refugees. Beyond the humanitarian concerns, the financial costs are immense, affecting governments, communities, and economies worldwide

Climate refugees: The unseen financial crisis of our era

BIS headquartersCentral bank body BIS flags new unpredictability in interest rate markets

There was also a warning that the pressure of higher borrowing costs could leave businesses and mortgage borrowers unable to cope and cause credit losses for banks and other lenders.

While there have been some signs of stabilisation in some property markets around the world, the loan losses both there and in other sectors will continue to cause problems as economies now weaken, Borio estimated.

“The question is how resilient the overall financial system is going to be in order to absorb those losses,” he added, “and particularly how large and persistent those losses are going to be”.


financial crisisIs the Fed ignoring signs of another financial collapse?

Minsky taught that a prolonged period of easy money and financial market stability sets up the conditions for pronounced financial market instability. By this he meant that as economic confidence rises and asset prices soar in a low interest rate world, the financial system tends to make increasingly risky loans on the assumption that asset prices will continue to rise and interest rates will stay low forever. When the easy money stops and lenders realize that they might not get repaid, the whole credit market house of cards collapses.


ghana presidentDespite a $3 billion bailout, Ghana has essentially gone bankrupt

Ghanaian government faces bankruptcy as it struggles to pay billions in debt to international creditors.

The IMF extended a $3 billion loan to stabilise Ghana’s economy amid the financial crisis and mounting debts.

Ghana’s ongoing debt crisis linked to COVID-19, geopolitical events, and rising food and fuel prices raises concerns about future financial stability.


indian women microfinanceIndia’s microfinance loans: Women in rural areas trapped in debt spiral

Microfinance – lending small sums of money to the very poor to lift them out of poverty – has been widely taken up in India. But almost 50 years after its introduction, the results are mixed. Microcredits, mainly for women, have turned Indian social structures upside down. In the agricultural state of Maharashtra, microfinance has become a living hell, with women trapped in a spiral of debt and harassed by creditors. In some villages, almost all the women are in debt.


spaghetti bingeGlobal debt surges to record $307 trillion amid borrowing binge

  • Governments and financial services companies fuel a jump in borrowing
  • “These debt ceiling episodes seem to be recurrent and getting more and more scary.

“For a while when the US was triple-A, we maybe wanted to give it the chance to prove this brinkmanship and polarisation was a phase, but I think we have come to the conclusion that is not the case any more, that this is perhaps the new normal for the US.”


oil rig dollar billOil Nearing $100 Is Red Flag for Central Banks’ Inflation Fight

  • Crude approaching $100 is new headache for policymakers
  • Volatility coincides with ‘higher for longer’ rates outlook

Higher energy costs will probably help restrain consumer spending, giving the central bank less reason to continue tightening. Fed officials will be on high alert for any signs that inflation expectations are drifting higher, but so far, that hasn’t happened.


cooking gas ringWill Europe face an energy crisis again this winter?

Countries across Europe are bracing for another energy crisis amid warnings about volatile gas markets and higher prices as winter approaches.


bin salman putinSaudi-Russian oil cuts are dragging Britain towards a new energy crisis

With the cartel estimating a deficit of 3 million barrels per day in the final quarter of this year, Kyle Rodda, senior financial market analyst at capital.com, points out that would be the largest shortfall since 2007.

The knock-on effects threaten to cascade through the global economy.


electric transmission towersFrench Utility Giant’s CEO Says Energy Crisis Is Far From Over

Europe’s energy crisis “is far from over” as risks to supply will continue to persist until new LNG volumes hit the market in 2026, according to Catherine MacGregor, chief executive at French utility giant Engie.


fannie mae building The US housing market is headed for the largest sales slowdown since 2011, Fannie Mae says

And the economy is already already showing signs of slowing. Optimists who say the US is on track to avoid a recession have pointed to still-robust consumer spending, but current trends look unsustainable when considering incomes, Fannie Mae said.


global chessboardThe Global Economy Enters an Era of Upheaval

Hard evidence is now emerging that all the discussions of strained international relations and more than a decade of warnings over the end of an era of globalization are finally spurring corporations to pick sides with their capital.


finite planet[From independent media, the wise Dr. Tim Morgan. The comments are well worth reading.]

The post-truth economy

There’s a plausible case to be made that we’re living in a “post-truth” age, and have been doing so since well before that term was “word of the year” for 2016 in the Oxford English Dictionary.

This is certainly true of the economy. The consensus narrative – propounded by decision-makers in government and business, supported by the economic orthodoxy, seldom questioned by the mainstream media and seemingly accepted by a majority of the general public – is that we can rely on an infinite continuity of economic growth.


You can read the previous “Economy” 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. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

18th September 2023 Today’s Round-Up of Economic News

Dear readers, a heads-up that this will be my last economic thread for a while, as I am taking a holiday and will be away from tomorrow until Thursday 28th Sept inclusive. I’ll be back with an economic thread on Friday 29th Sept and then a climate one on Saturday 30th. Thank you all for bearing with me, especially my donors and subscribers – you are appreciated!

A small group of volunteers will very kindly be filling in for me when I’m away, so you can continue to follow climate and economic news here in our usual fashion.

“Global inflation fears as oil price rises towards $100 a barrel.

“Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% since June, after Russian and Saudi Arabian production cuts and rising demand from China.”


“The World Is Struggling to Make Enough Diesel… opening a new inflationary front and depriving economies of a fuel that powers industry and transport alike.

“While oil futures are rocketing — on Friday they were just below $95 a barrel in London — the rally pales in comparison with the surge in diesel. U.S. prices jumped above $140 to the highest ever for this time of year on Thursday. Europe’s equivalent soared 60% since summer.


“Major central banks are on the brink of peak rates — but the inflation battle might not be over…

“Challenges …remain… with one being the prospect of significantly higher oil prices. Crude futures recently climbed to a 10-month high, which could impact goods costs and inflation expectations in Europe as well as the U.S.”


“World disappointed by the U.N. now looks elsewhere for answers…

“With dozens of world leaders descending upon New York for the United Nations General Assembly’s annual gathering, global problems are showing up fast and thick at the world body’s door — with no solutions in sight. And many countries are starting to look elsewhere to do something about them.”


“Global South leaders demand end of ‘plundering international order’.

“G77+China summit comes amid growing frustration with the Western-led world order because of widening differences over the Russian war in Ukraine, the fight against climate change and the global economic system.”


“‘A real big deal’: Biden backs economic corridor as shifting geopolitical alliances fragment the global economy…

“This Biden-led initiative will comprise of two separate corridors, the east corridor connecting India to the Middle East and the northern corridor connecting the Middle East to Europe… Saudi Arabia’s double dipping underscores the range of economic and strategic opportunities that abound for the various economies caught between the dueling U.S. and China…


“The market’s heaviest hitters are sounding the alarm on US debt

“Three market experts have cited concern that growing US debt will send interest rates up. Ray Dalio and Bill Gross both pointed out a supply-demand imbalance that will keep fueling borrowing costs. US debt supply will only grow, as a recession would expand the federal deficit, Jeffrey Gundlach added.”


“Does Wile E Coyote explain US voters’ gloom amid buoyant economy?

“…as an exclusive Guardian/Harris Poll survey found this week, two-thirds (68%) of Americans report it’s difficult to be happy about positive economic news when they feel financially squeezed each month. Across the country, poll after poll shows people are not feeling it. That’s not good news for the Biden administration…”


“Some banks see new cracks forming in a resilient US consumer…

“Executives from Wells Fargo (WFC), Fifth Third Bancorp (FITB) and Capital One (COF) all said this past week that they are noticing a divergence between the two ends of their customer base, with lower income consumers feeling more pain on several fronts.”


“California sues oil companies claiming they downplayed the risk of fossil fuels…

“The civil lawsuit filed in state Superior Court in San Francisco also seeks creation of a fund – financed by the companies – to pay for recovery efforts after devastating storms and fires.”


“[UK] Wind industry on hold after auction flop spooks developers.

“Offshore wind farm developers are delaying non-essential work on UK projects after a government renewables auction flopped, with industry sources warning they may be forced to wait until after the next election to get schemes moving again.”


“Parents in some of Scotland’s poorest communities are being pursued by debt collectors over unpaid bills for their children’s school meals.

“Renfrewshire council has admitted contracting a firm of Sheriff Officers – who have the power to seize property and raid homes – to chase the outstanding dinner tickets.”


“NHS sinks into £7bn cash crisis as inflation and strikes bite.

“The NHS is heading into an unprecedented financial crisis and will overspend its budget by at least £7bn next year as the effects of inflation and strikes plunge hospital trusts into alarming levels of debt, according to leading independent experts.”


“One year after a mini-Budget meltdown, Bank of England prepares to test the market again.

“The Bank [of England] is seeking to offload more than £700bn of bonds it snapped up in the aftermath of the 2008 financial crisis and the pandemic to help support the economy… If sales are ramped up, officials at the Bank will be hoping they do not see a repeat of the volatility seen this time last year.”


“France to let fuel retailers sell below cost in inflation fight, prime minister says.

“The French government plans to temporarily lift a ban on retailers selling road fuel below cost as part of efforts to stem inflationary pressures on households, Prime Minister Elisabeth Borne told newspaper Le Parisien. A renewed surge in pump prices this summer has complicated the government’s attempts to curb consumer inflation…”


“Germany: EU’s largest economy faces ‘big deterioration’ – and risks slipping back into recession.

“The German economy is facing a “big deterioration” in the second half of the year, with the European Commission downgrading its forecasts for the bloc’s largest economy. The German economy remained stagnant in the second quarter having sunk into a recession over the winter.”


“Czech protesters rally against government’s pro-Western policies.

“Thousands of supporters of a pro-Russian Czech opposition party gathered in Prague on Saturday to protest against the country’s centre-right government, criticising its economic management and military support for Ukraine.”


“Poland, Hungary, Slovakia to introduce own bans on Ukraine grain.

“…the flood of grains and oilseeds into neighbouring countries reduced prices there, impacting the income of local farmers and resulting in governments banning agricultural imports from Ukraine… the three countries argue their actions are in the interests of their economies.”


“The cost of damage from the record floods in Greece’s breadbasket is estimated to be in the billions…

“The storms flooded 720 square kilometers (280 square miles), mostly prime farmland, totally destroying crops. They also swamped hundreds of buildings, broke the country’s railway backbone, savaged rural roads and bridges and killed tens of thousands of livestock.”


“Italy: Frustrations grow on all sides as thousands of migrants flock to Lampedusa island.

“Italian Prime Minister Giorgia Meloni has vowed to take “extraordinary measures” to deal with an influx of migrants, including renewed calls for a naval blockade of North Africa.”


“Tunisia expels hundreds of sub-Saharan African migrants amid crackdown.

“Since Saturday, authorities in Tunisia have been cracking down on illegal migrants, most of whom are from sub-Saharan African countries. According to authorities, around 200 migrants “who were preparing to make the clandestine boat trip” towards Europe were arrested.”


“Chinese shadow bank exposed to troubled property developers…

“The connections between Zhongrong, a giant of China’s $3tn shadow finance industry, and property developers have fuelled fears of spillover effects from a slowdown in the real estate sector, which accounts for more than a quarter of China’s economic activity.”


“Authorities in China have reportedly detained employees of troubled real estate giant Evergrande Group [from its wealth management department], as the company faces a massive debt crisis.

“The Shenzhen police disclosed Saturday (Sept 16) that several staffers employed by Evergrande’s financial arm have been arrested. But police failed to give more details…”


“Alarm sounds for default rate of Asian bonds. Bond default rates are increasing worldwide, but especially in Asia-Pacific because of the impact of the real estate crisis in China.

“The defaults are for bonds across all classes of credit ratings, with the average time to default for Asia-Pacific bonds taking place more than twice as quickly as bonds at the global level.”


“Singapore’s non-oil domestic exports (NODX) contracted for the 11th consecutive month in August, falling by 20.1 per cent, with both electronics and non-electronics seeing a decline.

“The drop follows a revised 20.3 per cent decrease in July and a 15.7 per cent contraction in June. The August decline is worse than a Reuters poll forecast of a 15.8 per cent drop.”


“Sri Lanka’s economy shrank 3.1% in the April-June quarter, official data showed on Friday, as the country struggles to claw out of its worst financial crisis in decades.

“The downturn was driven by high inflation, a depreciating currency and lower purchasing power, the Census and Statistics Department said in a statement.”


“Pakistan’s other crisis… macroeconomic crisis, the most serious in its history, continues to warrant urgent and sustained attention…

“But there is another crisis that is worsening and is also consequential for Pakistan’s future. This is the crisis in human development — with most indicators of literacy, education, health and other aspects of social justice and human welfare deteriorating in recent years.”


“Central Khartoum in flames as war rages across Sudan.

“Flames gripped the Sudanese capital Sunday and paramilitary forces attacked the army headquarters for the second day in a row, witnesses reported, as fighting raged into its six month… The war in Sudan has decimated already fragile infrastructure, shuttered 80 percent of the country’s hospitals and plunged millions into acute hunger.”


“Mali, Niger, Burkina Faso sign mutual defence pact.

“”This alliance will be a combination of military and economic efforts between the three countries”, Mali’s Defence Minister Abdoulaye Diop told journalists. “Our priority is the fight against terrorism in the three countries.””


“NATO chief warns Ukraine allies to prepare for ‘long war’…

““Most wars last longer than expected when they first begin,” Stoltenberg in an interview with Germany’s Funke media group published Sunday. “Therefore we must prepare ourselves for a long war in Ukraine.””


You can read the previous “Economic” thread here. I’ll be back on Friday 29th September with an “Economic” thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.